Upbound Group, Inc. (UPBD) Earnings Call Transcript & Summary

So good morning, and welcome to both our live participants and those of you joining us on the web. We're really excited for you to join us for Upbound's Inaugural Investor Day and through the developments and the significant opportunities we see for the company. Before I begin, I want to note that our remarks today may contain forward-looking statements and are subject to factors that could cause actual results to differ materially from our expectations. So please review the disclaimer about forward-looking statements in the presentation as well as our annual report on Form 10-K filed with the SEC. Upbound Group undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law. We will also refer to non-GAAP financial measures. So please refer to our disclaimer regarding those non-GAAP financial measures and the reconciliations to the most comparable GAAP financial measures at the end of this presentation. These materials will be on the Investor Relations website, along with a replay of the webcast that will be available later today. So here's a snapshot of our agenda today. We'll start off with Mitch giving an overview of Upbound. Then we'll move on to Anthony. He will discuss the Rent-A-Center business, which is our stable cash flow generator. We'll then move to our growth story which is Acima and Tyler will walk through that with you. And then finally, we'll bring it all together with the discussion of the company's financial profile, and Fahmi will walk you through that. We believe Upbound has a compelling opportunity to create shareholder value, and we're really looking forward to sharing that with you today. And with that, I would like to welcome our CEO and Board member, Mitch Fadel, to begin telling you about Upbound.

Thank you, Brendan. Good morning, everybody. I hope everybody is doing well. Thanks for coming. This is our first investor event as the Upbound Group. We had one years ago, but this is our first one is the up-bound group. So again, thank you very much for coming and many of you -- speaking of Upbound, many of you know us for our operating companies, Rent-A-Center and Acima. But a few months ago, we announced and we adopted a new enterprise brand Upbound, which aligns with our growing platform of leasing solutions and credit products to consumers. So Upbound the holding company, of course, Rent-A-Center and Acima are our 2 biggest segments. But like I said, Upbound kind of aligns with our mission going forward, and we're going to talk a whole lot more about that today. So we're excited to present this to you this morning. So before we get into all the information we want to share with you, I just want to hit some key investment highlights of what we think you're going to find intriguing, it should become evident to you as the morning goes on. We think you'll find these types of things important, try to start out with an executive summary, if you will. And these should resonate as the morning goes on. So first, we're well positioned as one of the leaders in a relatively large market that provides us with the opportunity to generate strong profitability and grow at above average rates for the foreseeable future. So I think you'll see that as the morning goes on. Second, very resilient business model. A very resilient self-funding business model with a track record of performing well under various economic scenarios, and we tend to -- as most of you know, tend to outperform in a more challenging time. Third, we've got some really key competitive differentiators that cannot be easily duplicated. Some of them can't be duplicated at all. So we're interested to show you what we're talking about there when we talk about key differentiators. I think you'll find that interesting. Fourth, our platform of financial solutions and technologies provides us with significant opportunities to offer consumers new solutions and expand our business beyond just what we offer today. So we're set up to expand our offerings. That should be something very key and evident that comes across today. Fifth, strong liquidity. Cash flow is a big part of our story. Fahmi will get more into that as -- more towards the end of the presentations, but we've got strong liquidity, strong cash flow to support growth, pay a robust dividend and provide overall shareholder value. And lastly, we'll talk about our team. We have a strong diverse leadership team with experience and expertise to make to be able to execute on our strategy. So with that, let's get started talking about our company. As I said earlier, Upbound aligns with our growing platform of leasing solutions and credit solutions for consumers. And our mission at Upbound is really, really quite simple as the slide shows, elevating financial opportunity for all. Let's think about those words for a minute, elevating financial opportunity for all. And this mission is based on the belief that everyone should have the opportunity to access the things in life they need and the things in life they value, even if they don't have typical financial -- a typical financial profile that mainstream financial solutions are looking to serve. Not everybody has the financial profile to fit in the mainstream financial products. That's where we come in, where we provide flexibility. We provide answers and we provide options and we'll talk more about that as the morning goes on. So just who is this group of customers I'm referring to, who is a customer that doesn't fit into mainstream -- mainstream financial solutions. We want to start off by answering that question. Who's the customer that gets overlooked by the mainstream financial solution. Broadly, it's household, think about if you can make one statement, you'd say broadly, it's households with an income level of under $60,000. It's a vast majority of our customers. A lot of other statistics up here on the slide. But annual income of under $60,000 per year really fits into who our core customer is, our main customer, and they have a credit profile that's characterized as non-prime. You hear it call it subprime and so forth. We call it nonprime. It's either a lot of customers don't have any credit rating at all. And it's a much bigger market than most people think, or most people can appreciate. To give you some perspective, 106 million of U.S. households have either a subprime credit rating or no credit rating at all, 106 million. Most people have statistics surprised them the first time they had, just over 100 million people with what's considered subprime credit rating or no credit rating at all. And as you can see on this slide, the majority of households today have challenging personal financial situations that limit their ability to -- meaning unanticipated events or access things that they need. I'll let the statistics speak for themselves. But we see a tremendous opportunity to offer these people a platform of flexible financial solutions to address their evolving needs, big need out there. And where the -- we have the platform to serve their needs a lot of different ways, and we'll talk about that as we move forward. So to do this, we need the right team and we do have a team with a lot of market knowledge, strong functional expertise. You'll hear some of that this morning. It's critical we have the right leadership. We've undergone some changes over the last couple of years after we bought Acima about double the size of our company. So it's a little different management team, a little -- a newer management team than you've seen in the past. But I'm really, really happy with where we are today. I think we've got a great team in place to deliver on what we're going to talk about today. We've got a good combination of people that have extensive experience in lease-to-own industry plus new leaders from outside the company with strong functional expertise. So it's a good combination. I don't think you ever want to be -- have 9 people or however many is up on the screen, 10 people, I guess, on the screen. And all of them -- been with the company 30 years and you don't want 10 brand-new people either. I think you generally want to mix, and we have that. People like myself or Anthony, Ann and Tiffany, we've got decades of experience with the company. And so about half of us and some of us -- no old jokes over here, but some of us have more decades than others but about half of us have many decades with the company. But Tyler has been with Acima for a number of years, and now he heads up that business segment. We have an announcement going on. All right. I thought it was a fire alarm or something. So okay, little hiccup there. But so Tyler, I started to say talking about people on the screen, Tyler has been with Acima a number of years and he now heads up that segment. Well, folks like Fahmi and Sudeep and Mike and Bryan and Tran have joined us more recently, bringing in fresh and diverse functional expertise. So it's a good mix of people that know this business has been around a long time and then some real strong functional expertise. You're going to hear from Sudeep here in a minute about his functional expertise in technology, which is so important to our strategy as well. So today, we address the market with a platform that's primarily comprised of 2 complementary businesses that together make us the only player in the market with true omnichannel capabilities when you think about these 2 companies together. We're the only ones with true omnichannel capabilities. The Rent-A-Center business, which Anthony will walk through with in some detail today is our branded retail business. The history of the segment goes back 50 years really to the inception of lease-to-own. It's 50 years old this summer in July, Rent-A-Center turns 50 years old. It's been around a long time, about 2,400 locations in all 50 states, Mexico and Puerto Rico. Provides us with extensive last-mile capabilities between our local stores and our large fleet of trucks. So we got the last mile, both outgoing and returns back to the store. We got that covered about a quarter of Rent-A-Center's top line performance is now through digital channels. As you'll hear from Anthony here in a few minutes, rentacenter.com is a really strong growth vehicle for us, really solid growth vehicle. Acima, which Tyler will cover in details, our third party or our virtual lease-to-own business and functions as our point-of-sale solution that provides lease-to-own for other retailers. It's a technology-driven business, led by proprietary underwriting and analytics capability. It's got over 30,000 locations in 46 states, where we're integrated with the retailer. Of course, our key difference -- one of the key differentiators -- we'll talk more as the morning goes on about differentiators, but one of them is we can work with merchants with multiple models. We can be fully virtual. If they have some high-volume stores, we can staff those high-volume stores and even work with merchants when we're unintegrated, and we'll talk more about that. So more to come from Tyler later on Acima. The company benefits from a long iconic track record. I just talked about 50 years at Rent-A-Center. It's a testament to the durability and stability of our business and the value we provide to customers through various economic cycles. And there's always been a segment of the population that faces challenges in affording goods, and we've been there 50 years to help them with a solution, to help them with the things they need and want and Fahmi got a good slide later, he'll show you how the customer moves in and out of the transaction as far as when economy is good, when the economy is not so good, and -- but there's always a large segment for us. That's the beauty of our niche model here. So during the last 50 years, we've led the -- when you look at the time line, we've led the industry consolidation in the '90s and early 2000s. The brick-and-mortar consolidation, we're the leader of that. That's how we got up to 2,400 stores. We established a third-party LTL business in 2005 that later developed into the virtual lease-to-own market that we know today. We expanded our geographic footprint to international markets. We made a significant move into the virtual market, obviously, consolidating our legacy virtual LTL business with Acima to become a leading player in the market back in early 2021. We -- you can tell from the time line, we certainly know this customer. I know this customer. I didn't meet this customer back in 1973, although it wasn't that much later. In 1983, 40 years ago is when I first started in Rent-A-Center store in a manager training program. And we were talking about this the other day. And I met -- went out on a couple of deliveries the first day, and I didn't even know what Rent-A-Center was. I was working as a multiunit supervisor, I know I don't look this old, but I am. But at multiunit supervisor for Pizza Hut and my boss left and went to the startup Rent-A-Center. They've been around 10 years, but they had about 50 stores, and they're going to expand fast. And I trusted them. So I went over there, and I didn't even know what I was getting into, really. I just went blindly because he thought it was a good idea and a lot of us have done that in our careers, right, follow a mentor into another business. And -- but the very first day, delivering refrigerator, and we delivered bunk beds which at the time was the only furniture we even carried, it was just bunk beds for kids. And again, honestly tell you, 40 years ago, earlier this month, it was actually April 30 in 1983, meeting those couple of customers that I met that day. I've had the passion ever sense to serve that customer to when we're bringing a refrigerator into people that had their goods in a cooler, had the milk and all that in a cooler because their refrigerator broke, they had no money. They had enough to get a refrigerator from us for $20 a week or whatever it was back then, and we delivered it and they were so happy. And then the bunk bed, we're setting up bunk beds for kids, I go, this is pretty cool. And I really had a passion for the customer. Of course, there's the other side of the business where sometimes you got to go out if people can't afford something, and pick it up until they can afford it later, maybe they can come back and get it and so forth. So there's both sides of the business. It's not only deliveries, but what you realize real quick is how I got the passion for serving the customer and they realize the return sometimes where you take it back is necessary for the model to work for the company, how do you serve these people. You got to have the return feature and so you see both sides of it early on, but that passion for helping this customer has been with me ever since. So all the way back to 1983 and I've never lost it. I've never lost that passion because nobody else wants to serve this customer and they think they won't pay and all the stuff or they're bad people because they have bad credit. And that I can tell you from 40 years of dealing with this customer, it's not the case. These are -- there's a lot of good people out there that just financially aren't where they need to be, and we can help them, and we can help them. And we also make good margins along the way doing it. So it's a fun business, very passionate business. All of us are passionate about the business. You'll hear that in everybody's voice today that's up here because once you start serving this underserved customer, it's a lot of fun. And you see a lot of smiles. It's not like serving people like us that, I don't know how to describe the difference necessarily, but there's a passion when you're serving people that don't have very many choices. I can tell you that from my own story. But anyhow, let me move on before Brendan starts pointing at the clock or something. Our business produces strong financial results like I just mentioned, we can serve this consumer, but we can do it at good margins, and we'll talk more about that. We generated a little over $4 billion of revenues in 2022. It's about half and half between Rent-A-Center and Acima, which gives us a nice mix of stability and growth when it's pretty evenly split in our really foundational retail business of Rent-A-Center that has always been there for us for the last 50 years, very resilient and then the growth vehicle of Rent-A-Center. So it gives us a nice combination, about 80% is derived -- is comprised of rental revenues generated from a portfolio of leases. So that gives us good line of sight to our -- into the direction of the business and helps us make adjustments to optimize top line performance. So we've got a pretty good line of sight, because it's a portfolio business. We generate solid profitability and adjusted EBITDA margins in the low double digits to low teens over the past 4 years. And 2022 was a tough year for a lot of us. We had record losses, never had losses that high as we had in 2022 before we tightened our underwriting. You'll see numbers later, and I think most of you already know, we've got under -- in pretty good control now, but we had our highest losses ever. The highest inflation certainly we've seen since 40, 50 years, since I was a kid. And so -- and yet, we still had EBITDA margins of 10.7% in 2022, kind of a trough year. That's the worst that can get us 10.7%. We feel like it's a pretty darn good business model. And then what happens, you can see, hopefully, you can see all the way down at the bottom of the slide, but when you have a year where you're not growing a lot, your working capital works positively because you're not buying as much new product and you end up with over $400 million of cash flow. So when you grow a lot, you're building your future earnings, when you don't grow, you generate a lot of cash that year. So it's a very resilient model in any economic cycle. There's always a put and a take that's the 50-year longevity and only getting better. 50-year longevity and still growing. So pretty cool. Excited to share more with you as the day goes on. To really understand the opportunity that we have, though, I think it's important to drill down into the fundamental solutions that enable us to generate durable earnings power and growth, taking a step back and looking at the big picture, we make challenging commerce possible. And what do I mean by challenging commerce? Our solution bridges the gap between 2 parties that would face challenges interacting with each other. How do they interact with each other? Underserved consumers. They lake the capital or the credit to access the goods they want. Retailers, merchants need more customers to drive growth, but they normally only have mainstream financial solutions for customers. And they lack the data, the analytics and the servicing capabilities to profitably transact with the financially underserved customers, what do they do with the 550 credit score in their store. They don't have any way to serve that customer. But we bridge that gap, Upbound bridges that gap with our underwriting, our logistics, our capital and technology that enable us to act as an intermediary and earn appropriate returns for our shareholders at the same time. So we're the platform between that underserved customer and merchants. Obviously, that platform ourselves at Rent-A-Center, but on the Acima side, we're the intermediary between that underserved customer and the merchants, the retailers. We view our business as a technology platform that can add complementary products to serve these 2 stakeholders. A good example of that also is the credit product we announced last week, and we'll talk more about by partnering with Genesis Financial Services. So again, that middle platform, they can put these -- the customer together with the merchant that needs that customer for growth. And growing those opportunities through like a Genesis partnership and so forth. And like I said, we'll talk more about that. But let's talk for a minute, first about omnichannel and how we differentiate. And there's 2 examples up here. Ashley Furniture, I think everybody has probably heard of Ashley Furniture. They're actually the largest furniture manufacturer in the United States and one of the largest in the world. We -- so how do we work with them? How do we work with the largest furniture company in the United States. Well, Rent-A-Center -- we supply Rent-A-Center stores with Ashley Furniture, that's one way. We're their largest customer outside of their own home stores. So we're the largest Ashley who buy our merchandise. We supply the stores. Then we also have Ashley on what we call extended aisle. So the majority of their products are on rentacenter.com, not necessarily all supplied to the store. We can't put all their products in our store. But we do give that underserved customer full access to ashley.com through extended aisle, we get special order from Ashley anything that they make. So that's the Rent-A-Center side. On the Acima side, we're there for their customers when a customer goes into an Ashley store or on ashley.com. We get them a lease through Acima. So you can see how that partnership really starts to -- you see the omnichannel part of it. We're buying a lot of product, but then we're also leasing a lot of their product when people go directly to Ashley. So we either meet them at the Rent-A-center store and serve the Ashley customer or we meet them on ashley.com or inside an Ashley store. And speaking of the stores, I mentioned it earlier, some of their larger stores, we even put supplemental subject matter experts and their lease-to-own experts in there to staff the stores so we can staff some of them, some of them are virtual. We've got a lot of different ways to serve one company like Ashley, a true omnichannel experience. And there's nobody else that can do all those things with Ashley that we can do by having the store experience. The Rent-A-Center experience, the extended aisle on Rent-A-Center, and then meeting the -- giving the customer a lease when they go on an Ashley store, talk to one of our staff or even their salespeople or ashley.com. And soon they'll be on the Acima marketplace as well, both on the Acima marketplace and through the mobile app. So a real true -- when we talk omnichannel, we're talking about a lot of tentacles to that to the way we do business. And Best Buy is the other one up here. And this is interesting because we're not as integrated with Best Buy today. But on the Rent-A-Center side, we are, we have extended aisle, we have a lot of Best Buy product on rentacenter.com site. So we can give the underserved consumer that we serve access to a lot of Best Buy products directly and write the lease. Even unintegrated through Acima's mobile and marketplace technology, we can again provide the underserved consumer the product assortment of the Best Buy. So Acima even unintegrated with Best Buy has -- if you go to acima.com, either the mobile app or the marketplace, the Acima marketplace, you can still shop and get Acima lease-to-own on Best Buy without ever going into the Best Buy store, so -- or without ever talking to anybody. So numerous access points. And we're the only LTO company with all of those access and distribution points and using Rent-A-Center, and Acima together is a real differentiator. It's truly a differentiator. And soon, we'll also add the second look financing option to this already proprietary and differentiated model. So let's talk a little more about our industry and the opportunity. Basically, Upbound is in the platform business, like I said. And we're a platform in between underserved consumers, retail products, people need and desire and retailers themselves who need this growth vehicle. We are the conduit, if you will. The consumer provides a huge market for both Rent-A-Center and Acima. You see the income levels of each of our 2 main segments. Younger than you might have guessed also when you look at that age thing. Most people think our customers are older, but they're not. They're younger than most people think. The consumer spends about 8% of their income on durable goods, the average consumer, our average consumer. So only 8% of their wallet through durable goods, but we'll talk more in a few minutes about how we increase our potential wallet share with them with some of the new financial products beyond that 8%. Retail locations provide a huge market for Acima, less and yet, we have less than 10% penetration, 31,000 out of over 400,000. So tremendous opportunity on the retail side of Acima as well, not even talking about the e-com opportunity, but just the actual durable goods locations, 400,000 to 450,000. We're in 31,000, which is pretty darn good, but there's still an awful lot of opportunity. Obviously, that's not even 10%. And then from an e-com standpoint, you can see the growth at the bottom of that slide. It's coming along, we're growing e-com, but it's still in its early stages, and we've got a lot of growth opportunity on the e-com side, too. Not to mention additional industries we can still move into besides the one we service today. So that are on the bottom right-hand chart. So there's other verticals for us to get to as well. So lots of growth opportunities. And expanding our offerings, talking about expanding our offerings, we are uniquely positioned to increase market share and expand the market. Everyday needs, through a general purpose credit card, right down here on the left, 45 billion to 55 billion in the durable goods side, but there's -- we can branch out. We've got new industry. We've got everyday needs through a general purpose credit card that we announced -- when we announced the Genesis partnership. New verticals like I talked about, especially with the credit products, new verticals like dental and medical and so forth that we can get into. And we've created the opportunity to expand the point being, we've created the opportunity to expand past just durable goods. So let's talk about our strategic priorities now for Upbound before I turn it over to Sudeep to talk about how he's going to support -- use technology to support these strategic priorities. So we're going to talk about 3 of them: continued investment expansion and our optimization. So investing. Investing, what do we mean when we say investing? What do I mean when I think about investing? Creating the omnichannel play for consumers to move in and out of products is one way. Moving into new product verticals, like I mentioned a minute ago, technology enhancements to serve the customer even better and faster than we do today. And like I said, Sudeep is going to talk more about that in a couple of minutes, and then continue to invest in talent and adding talent at all levels of our organization. So that's one strategy investing in our platform. To expand our offerings, retail credit is one where we expand in the industries that lease can serve, like dental and medical and so forth or really expanding into the getting deeper into the automotive industry as well. Our omnichannel platform will create a consumer opportunity to move up and down and sideways, through our offerings as they evolve in their financial journey. This really creates a lifetime value building flywheel. That's what we're trying to show. All these different products can add lifetime value, and it kind of gets that consumer flywheel going. And we've already got really good repeat business, but with more products, we can drive even more lifetime value than we have today. And for our smaller retailers the opportunity to have a large second look provider to say yes to more consumers is very powerful, leveraging our existing sales force to sell more products, it gives retailers a chance to increase conversions and produce incremental sales, truly maximizing our opportunity. And what I'm talking about here is expanding the offerings beyond lease-to-own through our Genesis partnership. We announced this, I guess, just last week, seems longer, but I guess it was just last week. And it creates extended opportunities for us and our consumers. There's a lot on this slide, but we've partnered with a leader, Genesis, they're a leader in the near and subprime space, credit space. It partners us with someone that's got scale, day 1. We're not talking about partnering with somebody that's really small. They have scale day 1. We can -- it allows us to leverage relationships. And we're really talking about 2 main pieces. The left side being general purpose credit card which will be -- with our data, we can offer a card for everyday needs like groceries and guests that others can't. It's really a data play when you think about general, there's a lot of credit card out there. So what's so special about us partnering with credit cards. We've got millions of customers, millions of customers, tens of millions actually in the database, but millions every year. And we've got the data on the customer that others don't have, like how they've been paying us and so forth. So we have the data that allows us to give someone a credit card that nobody else will give to, not big, you talk of $500, $600, $700 types of credit cards, but we can do that with Genesis' ability to underwrite and with our data. So it's really a data play that nobody else can do because they don't have our data, right? So that's credit card. The retail credit and lease solution, that's the one-stop shopping for retailers, where we can give them a secondary look option with the lease-to-own option now. 1 integration, 2 different products. And we can do it with our current sales team that's already outselling Acima. So it doesn't add overhead. So the general purpose credit card is more of a data play. The retail credit and lease solution is one-stop shopping for retailers using our existing team, one integration with -- in 2 products. So pretty exciting stuff. We estimate -- you might not be able to see that bottom screen with people sitting in front of you but we estimated an additional profit range for us of $25 million to $40 million annually once up and running. So $25 million to $40 million annually once it's up and running, it's probably conservative. We didn't stretch to get to those numbers. And I think it's also important to point out in this kind of partnership. This is a fee-based partnership where we're using their expertise. So we're getting fees every time we sign up a customer. That's how we get the $25 million to $40 million. And so when it's just fee-based, what does that also mean, there's no risk to us. There's no -- we don't have any risk. This is in our balance sheet. This is a no-risk partnership for us, with the $25 million to $40 million profit number we believe once we're up and running as well as some other benefits, right? It makes us stickier with retail partners, offering them 2 products. It gives us a much larger addressable market than we currently talk about in the $45 billion to $55 billion range. So a lot of benefits to it. No risk, partnering with a very large company in that space now, really excited about it. And I think as you see it come to life later this year, when we get it up and running, you'll be excited about it, too. It's quite an opportunity for us and we're really jazzed up about it. So this means optimized offerings where consumers have numerous choices with us. They can have a list Rent-A-Center. A customer can move in and out. They can lease a Rent-A-Center. They can get a credit card, maybe they qualify for a credit card. They end up in a retail store that Acima is in there or maybe they get a loan in that retail store through Genesis, so we get a fee for that if they qualify for that. So they can return products any time. They can own them. I mean this is a real flywheel, a customer really -- so many different options of going in and out of the transaction that goes on and on. And like I said earlier, we got over 70% repeat business at Rent-A-Center and over 30% repeat business already at Acima. So what happens when we start offering even more products, how much more lifetime value do we add. So as we connect the products and allow consumers this type of flexibility to move between our offerings will multiple Upbound products, will create an even more compelling lifetime value for our customers and even a stickier relationship with our retail partners. So that's our strategy. We need technology to help us with it. And I want to introduce Sudeep Gautam, who joined us just this past January and has already made a big difference from a technology standpoint. So Sudeep, it's all yours.

Good morning, everyone. My name is Sudeep Gautam and I lead Technology for the Upbound Group. My objective for today's presentation is twofold. First, provide you with a comprehensive view of our current digital landscape, specifically our products and platforms portfolio and the business outcomes they've delivered. Number two, talk about our path forward. So I'll explain our digital strategy, select initiatives that we are embarking upon and discuss how we plan to leverage technology in shaping our growth. Technology is quintessential to serving our customers and running our business. And our business is unique. We have conceptualized, designed, developed and deployed an extensive suite of homegrown digital products that is customized to our business. And these products enable critical aspects of our value stream from awareness to conversion to service. The products have been designed keeping in mind some very important characteristics. First, we want to maximize conversion, reduce or manage any sort of abandonment rates and finally, increase retention. The customer experience in each of these products is directed towards increasing our Net Promoter Score. The results, as you can see, are -- have been exceptional. So let me double-click on a few of these products and platforms and specifically talk about the metrics that we've accomplished through these. The Acima lease-to-own platform for us. Over the last 3 years, has generated about $3.7 billion in our GMV. The Acima lease-to-own platform is the workhorse of the Acima business. Through this, our customers can shop, they can apply, they check out and they manage their leases. Our decision and risk engine has processed about 3.75 million applications in 2022 with our fraud risk scores outperforming top industry models. If you look at it from a Rent-A-Center perspective, our payment -- our first payment default rates have fallen about 30% over the last 12 months. Let's talk a little bit about the mobile apps, both at Acima and RAC. We recently announced that the Acima mobile app had surpassed 1 million downloads. At the same point of time, Rent-A-Center app, which is a little older, has surpassed 3.1 million downloads. That is a testament to the usability and stability of the app. The Acima mobile app today as well as Rent-A-Center app are the primary channels through which customers engage with us. The store systems that we have within our 2,400 Rent-A-Center stores, they are used not only for a point-of-sale system, but also for fulfillment, inventory management and delivery. And today, they support about 1.2 million active agreements. And finally, last but not the least, I want to talk a little bit about our e-commerce footprint. Our digital adoption rate has been significantly increasing over the last 3 years. And if you look at the Rent-A-Center revenue from an e-commerce perspective, that revenue is about 25% today. If our foundational investments and technology, focused on unlocking the value of financial access, then our current wave of digital progression is about harnessing value from important data that we've gathered over the years and embedding intelligence in every second-generation products that we've developed, ultimately creating a network of interconnected intelligent and innovative, intuitive solutions that shall enable or turn on the switch for hyper-personalization. Our digital strategy is composed of 5 elements. First, drive adoption and digital growth through new capabilities into our e-commerce channels. Second, organizational and technology readiness to seamlessly onboard new product lines as well as geographic expansion. Third, deliver an unparalleled and consistent omnichannel experience for our customers, retailers, coworkers and partners. Fourth, increase our EBITDA through automation and process transformation. And finally, rebalance our digital investment mix in the portfolio to maximize business impact, which essentially means that how do you direct investments today or money that we spend today on keeping our lights on to moving them to increasing our experience and revenue growth. And these 5 elements in our digital strategy delivered 3 critical business outcomes for us. First, supercharge customer loyalty; second, increase organizational effectiveness; and three, help us defend, extend, create and disintermediate our business models. I'm specifically very excited about some of the initiatives that we've carefully chosen to invest in that would drive some of these growth strategies. You will see over the next few presentations, both by Anthony and Tyler. They would be talking a lot about these initiatives, plus a lot more. The expected outcomes that you see on this chart directly coincide with each of the initiatives that we've talked about. As Mitch mentioned earlier, Upbound's mission is to elevate financial opportunity for all. Our digital ambition is to seamlessly connect a financially underserved demographic base across a diverse product portfolio, irrespective of brand or channel supported by an Upbound ecosystem of suppliers, retailers, partners and coworkers, ultimately creating or providing, I would say, giving them a power of choice as we call it. And this power of choice is about choice of customers -- sorry, choice of experience, choice of price, choice of the products they choose and choice of ownership. From a growth strategy perspective, we are playing offense. And technology will continue to drive that growth strategy that is centered around creating this value network of offerings enabled by a frictionless experience, thereby increasing net our customer lifetime value. Our technology strategy is transformative, yet practical. It shall fundamentally change the way we actually bring all these technology domains together a modern stack and how we integrate them to form meaningful solutions. We are reinventing the role of technology within our enterprise to deliver growth, synergies and stability. We are designing a technology delivery model that is built for speed and stability and scale. And we are solidifying a foundation that fosters collaboration, resilience and innovation. Efforts around leveraging our technology domains have been extensive. So let me do a double click on a couple of these things. Let's talk about data, needless to say, I mean, without data, you really can't do anything. But data needs to be available. It needs to be trustworthy and it needs to be secure. So we've done a bunch of things around the data aspect of the domain here. First, what we've done is we've established a single source of truth through our master data management tables. Which means identifying an accurate data available in real time across all our value streams. We've also unified our data, right? We've unified data across our business lines. So data -- customer data, for example, from Acima and customer data from Rent-A-Center has been collated and put into a global common database today. Data integration is an important and essential part of a data pipeline. We've also seamlessly combined data from multiple sources where these data aspects are generated, and we've directed towards a unified view into our cloud-based enterprise data warehouse and our data lake. These repositories, which store vast amounts of data today really spur our AI engine that we use for our decision and risk models. In addition, what we've also done is we are implementing best-in-class analytics and platforms to provide self-service across our business functions to deliver the kind of insights they need at the velocity we desire. Let's talk about platform-oriented architecture. So in my mind, this is something which is really close to my heart because this is one single technology domain that will reduce and contain the amount of technical debt that each organization today faces, not just our organization but every other organization out there. But moving from a modular to a micro services flexible architecture is going to dramatically contain the technical debt. Not only reduce the technical debt but also increase the speed of building applications, scale them from simple to complex applications and while decreasing the cost base of developing the same applications. The amount of reusable components that we would be kind of using for this -- through this architecture would simplify dramatically composition and integration of different business functions that would come together to form a logic. Finally, let me talk about infrastructure. So over a period of time, what we've done is we've reduced our footprint in the data center. We've also put in place a hybrid cloud environment. Now keep in mind, one thing that our broader cloud strategy is actually defined by the kind of workload or the characteristic of the workloads that we have today and tomorrow. So that will continue as we kind of drive our journey to the cloud. It's also going to be driven by our app modernization plan, our application modernization plan that we've kind of put in place. Next, let me talk a little bit about cybersecurity. So our posture on cybersecurity is extremely aggressive. We have implemented the best-in-class tools, the most sophisticated monitoring tools that can help us detect and prevent any sorts of attacks from outside. What we're also doing is that we are constantly identifying any kind of possible vulnerabilities within the enterprise, and we address them immediately. To summarize it all, I would say digital at Upbound is about simplification. Simplify yet revolutionize the way we engage with our customers and empower our coworkers. We increased organizational effectiveness and innovate our business models. Thank you so much. Next, I'm going to hand over to Anthony Blasquez, for going through his slides.

My name is Anthony Blasquez, and I'd like to start this morning by introducing how I came to Rent-A-Center. And a little bit over 1/4 of a century ago in Tampa, Florida. I walked into my first rack location to start a new job as a delivery driver. I'm fortunate that I've had every operational position in the company since then. But back then, it took me a couple of weeks to understand exactly what I was going to be doing for this job. And I was a bit unsure about it. But much like Mitch after some time, I began to realize 2 things. Number one, I could see this turning from a job and turning into a career. And number two, I saw the opportunity to serve people in a community that I grew up in. Actually, the story that I started in was about a mile away from where I was born and where I grew up. So I was really embedded in that community. So some close to 26 years later with our organization, I'm as excited today as I was back then with the opportunities that we have, not only in front of us right now that we can capture, but also through our strategic initiatives, the things that I really believe we can bring to bear in the future. So as I begin this next 30 or 40 minutes with you, I really wanted to start by making sure that you understand who Rent-A-Center is and what exactly it is that we do. So starting right here, we are the leading dedicated lease-to-own retail platform. We really are a unique blend of retail, consumer services and specialty finance. As Mitch mentioned, 50 years young later on this year, very excited about that, and we've been providing access to our customers since the beginning, and it's something that I'm very, very proud to be a part of. We bridge the gap between customers and high-quality goods with an almost exclusive 100% LTO transaction. That's where our transactions start predominantly, 98%, close to 100, roundup, but it starts with the customer coming in and entering into a lease-to-own transaction inside of one of our retail stores. Speaking of which we have a very strong market presence, 2,400 local retail locations and a growing digital business. Thank you, Ann. Appreciate that. So overall, it's a very, very strong value prop for our customers, quality products, no credit needed, the ability to execute lifetime reinstatement, which I'll touch on in a couple of minutes, and we offer free delivery and free service to our customers. So that's really who we are. And then when you think about who we serve, that's on this slide right here. It really is a unique, captive and underserved customer base due to limited choices. They're lower income. They skew much lower than the national average. You can see in the Rent-A-Center business, a little bit north of 50% of our customers earn less than $30,000. You can see that in comparison to the national average. 75% of our customers earn less than $50,000. And lower FICO score by about 200 points on average. And it really is a unique customer for us because based on that criteria right there and that makeup it provides a pretty good moat for us. We're able to serve that customer, and it's a steep barrier to entry for others that don't understand this type of underserved consumer. And generations of family, as you can imagine, after 50 years, have rented with us. And as families change, we're there to support their needs. And I can still walk into Rent-A-Center stores that I managed, as I was able to move up in the organization. And I can see that children and grandchildren of people that I opened their first lease are still renting inside of the first store that I ever worked in, which is really, really great that we're able to serve generations of families. So we know that our customers have a unique need, and knowing how to serve them is really what I believe our differentiator and our secret sauce. So I think we should look at how we serve that customer. So we know that it's a differentiated business model and it meets our consumers' needs. And so here's this virtuous cycle that you can see on the screen, and it starts with the product being sourced. Wholesale is primarily over 90% of the product is sourced wholesale. But as Mitch mentioned, with extended aisle, our access to Best Buy and other local retailers, we're able to source regionally, if need be, to serve a customer's needs. But by and large, the product is sourced wholesale. The customer shops with us, either digitally, which continues to grow, which is fantastic or inside of our stores, which were always there for our customers. We underwrite them, we set up the agreement and then we service the product after we do the delivery for them. We manage the account locally. So our stores, those 2,400 locations, they help our customers with payments, service issues, if they're experiencing any problems, we take care of it. And the main differentiator here for us. You can see it on the bottom right-hand side of the slide is that we offer our customers the ability to return the product at any time with no further long-term obligation. And as I mentioned earlier, the lifetime reinstatement being one of the cornerstones of our value proposition. It really allows our customer flexibility to come in and out of the transaction as effortlessly as they want to. They can come in and rent something today. They can rent it for a couple of months, they can do a return very easily and they can come back in, and they can keep what they've invested with us and apply that towards something else. So it is a very, very unique model that allows repeat business regularly. And Mitch mentioned it earlier, if you think about that returns, not only is it a differentiator, it's also an enabler for the transaction. If you start thinking about the makeup of the type of consumer that we're dealing with, the ability for us to return the product if they run into trouble and rerent it to someone else for a discount really allows this model to work on a consistent basis going on 50 years. So we know our customers' pain points and we have a relationship with them. And I can tell you another part, another ingredient, if you will, of the secret sauce is having ran these stores since 1997, having the opportunity to work in these locations. I know that our customers, especially this type of customer is under pressure. There is always someone that they owe money to, and we happen to be another person that they might have a bill coming due, a payment coming due. But the interesting thing about it is that because I am in the community and our 2,400 locations are in the communities that we serve. We have a relationship with the customer, and they have a relationship with Anthony, not just someone else that they owe money to. So it really does facilitate a better transaction, better relationship with the customer, and it makes this model work. So having a relationship and staying in the community is very, very important. And when you think about the uniqueness of those customers, I think you're getting the clue that they require a higher touch. And that's both during and after we opened the rent-to-own agreement with them. Because of this, our local store base is critical. Our stores are there to facilitate this business model, and it's a large operation. I mentioned it a couple of times, 2,400 locations across all 50 states, Puerto Rico and Mexico as well. Around 9,000 coworkers who I love of working with, and I appreciate everything that they do for our company. But the interesting thing about those 2,400 locations is each of our store managers really manages 100% of their own P&L. So it's an owner-operator mentality, so having that local presence, our store management team is responsible for all aspects of the P&L. So there's a real defined amount of ownership inside of those stores. We also have 2,800 vehicles, travel around delivering products and servicing them for our customers. The stores also are responsible for the last mile. As I mentioned earlier, they do returns, and they also service the product to the customers as well if they need it. We make sure that we're quick and flexible to meet our customers' needs. The stores also are part of sales and marketing efforts. If you think about the conversion of both our e-com business as well as our in-store traffic, we get better conversions in my opinion, because the stores are still a part of the customer's journey, even if they decide to transact -- start the journey on the website, we can be there for that customer as much or as little as they would like. I mean you can imagine starting a journey with insert brand here on the web and you want to call someone that's in a local location, a couple of miles away from where you live, and you can speak with someone who can go ahead and continue and help you through the rest of your lease-to-own or rent-to-own journey. I mean that is a big differentiator for us, and it's one that we like to lean into. In addition to that, having those local showrooms, as Mitch mentioned, we've got a lot of product on extended aisle, but it is also good to have the staple products inside of those 2,400 stores. Customers can come, browse, they can speak with our knowledgeable coworkers and so forth, and we can help them with the transaction. And then in addition to that, we know that there's risk, and we know that there's account management. 50% of the stores are still made -- 50% of the payments rather are still made inside of these stores. The coworkers in the location are going to do the delivery even if the customer decided to do the entire checkout process online. When the coworkers in the store, that remember, they own the P&L, go out to do the delivery, they're able to confirm who that customer is to make sure that it's the same person that opened the lease online. So it eliminates that anonymity that the customer might have, and it reduces our exposure to risk and the fraud. And by doing that, not only does it reduce losses for us, it allows us inside of the locations to underwrite deeper because there's still local accountability, and we have the coworkers that are there, those trucks that are there that can visit the customers if need be. Being that close to our customers provides accessibility for them. It also provides a degree of accountability, if we do need to go out and make contact with someone that we haven't spoken with in a while. So one of the things that I love in kind of wrapping this slide up about the local store base, you can see that good look in Rent-A-Centers there on the top right. Somewhere today, I would imagine that one of our active customers or one of our previous customers or one of our potential customers could have a refrigerator, Mitch mentioned the fridge. We always talk about fridges, but this is a real thing. The fridge could go out in one of our customers' houses. The food could begin to spoil. Their medication could start to go bad. And you think about this type of consumer, where can they go this morning and for about $25, walk into a Rent-A-Center store, give that to us, and this afternoon, we'll have a new refrigerator in their house. I mean you think about the people that are in this room, imagine people of means, I think it would be next to impossible if any of us walked into a Big Box retailer today and pointed to a refrigerator, swiped their credit card or paid cash or whatever and to think that we could get it this afternoon. So you think about this differentiated model that can really serve a customer's needs as well as their wants, here it is right there. So I'm very, very excited and thankful that we get the opportunity to help this type of consumer. So as you see, our stores are really the enabler and they're vital to the success of our operation. But I think it's important for us to look at how the business has performed historically, been around for a long time, 1973, 50 years young this year, fantastic. Consistent performance, $1.8 billion to $2 billion in revenue, $200 million to $300 million worth of EBITDA, lots of free cash generated. We outperformed retail in '08 and '09, showing the strength of the business model. We did have trough years in the Rent-A-Center business 2015 to 2017. But again, we're still able to generate a significant amount of cash. And when I look back on those trough years, I know that I can point to some internal decisions that we made that were really the leading cause of some of those issues that we experienced. But I am very, very thankful that the resiliency of the business, we were able to pivot and turn the performance around in 2018 and 2019. And I want to reiterate, this is a very resilient model that can perform well even in tough times. So we know that we performed well historically in good times and in bad. With that in mind, I'd like to dive a little bit more deeply into the last few years and kind of show you what our trajectory was going into the pandemic and so forth and then after. So if you look on the left, you can see into and through the pandemic, we were on an upward trajectory prior to the pandemic. During the pandemic, I believe we made some very, very good decisions. We outperformed our competitors in same-store sales and revenue growth, all 8 quarters of the stimulus period. And I want to thank our coworkers because there were a few things that we did. Our coworkers made it a point to safely stay open to serve our customers in the communities that we're in, in a time of need. You can imagine our customer without a lot of means, when all of a sudden, school is closed down and they need to go ahead and educate their kids from home, and they don't have access to a new laptop computer. We were there for those customers. So staying open was critical to us making it through the pandemic. I want to thank our merchants. They did a phenomenal job of sourcing product for us during that time when there were issues with supply chain, a lot of differentiated means that they went through to make sure that we had the inventory to serve our customers' needs. We brought to bear centralized underwriting, which -- that was a game changer for us because it started by facilitating higher conversion. When everything shut down and people start going home, they started shopping online, us having the ability to have centralized underwriting allowed us to complete and transact with our customers as much or as little on the web as they wanted to. In addition to that, it just so happened that it was limiting our exposure to loss as well. We introduced our CRM software sales force, which allowed us to digitally communicate with our customers. So that was a game changer for us. We could text back and forth with our customers. We can make instant contact with them; they could respond to the store and so forth. And then we continued, and we still continue today to make major website enhancements to reduce friction for our customers and help them get through the transaction smoothly. We know that stimulus raised our retention rates and lowered our exposure to losses. And when you look at Q1 and Q2 of 2022, it was good. We were on track. I felt good about the trajectory of the business. Then Q3 and Q4 came along, and inflation and gas prices spiked. And Mitch mentioned it on the last earnings call, which was we feel our customer already went through their own recession and they've gone ahead and balance themselves out, and they've normalized now. But Q3 and Q4 was a tough 2 quarters for us. We did adjust, I feel that we've made some really, really good decisions. The business and the losses have stabilized and are now normalizing. And if you look at the difference between Q4 of 2022 and Q1 of 2023, our losses improved by 100 basis points. And if you look at the trajectory in Q2, our loss is going to improve from Q2 versus Q1 of this year. So I feel like we've got a good handle on the fundamentals of the business. So there it is. We know that we had some challenges in the back in the back half of 2022. I believe that we manage them well. And so what does that leave us with? That's really now an opportunity of, okay, where are we today? And when you look at a snapshot of the business today, annualized portfolio value of $1.7 billion. We have about 1.2 million agreements on rent. Those agreements come from roughly 1 million unique customers each and every year. Our skip/stolen loss rate, 3.6% over 5 years through good times and bad. And really, that's there to showcase that this covers pre-pandemic. This covers the pandemic and post so that we get all phases of our business represented. We have a strong web presence with over 50 million visits to the website each year. 18 million of those visits are directly shopping with us. And if you think about the balance, that's really making up customers who are visiting our website to make a payment or to view their account. So it's a pretty captive audience that we have in front of us. Also, it's important to note that we have a diverse portfolio mix across a wide range of categories with furniture and appliances being our 2 biggest. But we have other products as well, which can complement and offer some differentiated verticals. E-commerce, again, excited about the opportunity there is now over 25% of our portfolio. So it's a strong state of the business. And within that, I want to double-click into e-commerce, which hopefully you can tell that I'm pretty darn excited about and discuss the progress and really some of the opportunities that we have ahead. Overall, I think the team has done a remarkable job of successfully growing the e-commerce business these last 4 years during intentional efforts to improve volume and conversion. Look at that web traffic, leads have grown double digits annually the last 4 years. amidst increasing volume, and this is very, very important, you can see that the volume is going up. But on the bottom chart, you can see that the conversions continue to improve by over 1,000 basis points versus 2018. So not only are we getting more eyeballs, we're also improving our conversion at the same time. Some of the key initiatives that have been driving this is, again, Ann and the team continue to optimize the website, improving flow through, including centralized decisioning, enabling the customer to fully transact online. Again, those stores are there as much or as little as the customer would like. So if the customer wants to go from soup to nuts and go ahead and complete the entire transaction on their own, they can do so. And then shortly thereafter, smiling Rent-A-Center employees will be out delivering the product to their house. Most recently, again, thanks to the merchants, we now have more than 3,000 additional SKUs on the website with extended aisle as well as we know that over half of the products because the transaction is so flexible for our customers and allows them to return at any time, we know we get returns, and that's okay. Now we have the opportunity to showcase that product on our website and show a great discount to the next customer. So between extended aisle and being able to showcase our previously rendered products. It's really opening up the assortment that we have for our customers to select from. So an interesting stat. If you think about that flow-through of visits to leads and conversions of those leads, it's around $100 million in revenue. For example, every 5 points we move in conversion is $40 million, give or take. So these aren't -- this isn't chicken feed we're talking about. So this is very important for us to continue to improve the experience for our customers. And that doesn't even include -- if you remember, I said earlier, we have about 36 million customers that come to the website and are either looking at their account, trying to find out where they're at in the journey or they're making a payment. That's an audience as well that we have an opportunity to go ahead and add on or continue to retain. So great opportunity for us. If you think about what makes me jump out of bed in the morning, it's this slide right here. Very excited that in a 50-year business, there's still this much opportunity for us. And here's my sales pitch. If you haven't been to rentacenter.com, please do so I think you'll be pretty impressed, 3.1 million app downloads and hopefully, you can make it like 3.1 million another $30 million. So I appreciate it. So parallel to the concept of our ability to make meaningful impact with really some small enhancements. As we look ahead, other things that make me really excited about the future is the opportunity to extract value from what already exists today. So our opportunity to drive growth, if you look at the internal opportunities, looking back on the last 5 years, look at the number of unique customers that we've touched. Look at the unique web leads. Getting more leads out of those 18 million shoppers that I talked about on the previous slide, that is going to drive tremendous growth for us. We get 5 million unique web leads generated. And when you look at even with the progress that we've made, there's still more opportunity in front of us. We serve 3.3 million unique customers. We also have over 2.5 million customers that are inactive with us that know our transaction that can come back and do business with us again. So we have the opportunity to reactivate customers. So there's a lot of internal things that we can address, and we're working on it. On the right-hand side of the slide, this is what's already there. On the right-hand side of the slide is that addressable market of about 40 million potentials and only about 1 million are transacting with us. So somewhere around 20% to 25% of U.S. consumers are in our customer pool. The local stores that I mentioned earlier cover around 70% of the target households. So we remain embedded in the communities that we serve. So we're there for our customers when they want or need us. And honestly, we're there. And in my opinion, we're going to continue to remain there because it's a differentiator for us and it facilitates the transaction. So there's a big pool of prospects for us to attract. So the next question that needs to be answered is how are we going to address this opportunity. So here's our strategic priorities for the Rent-A-Center business, grow customers, increase customer lifetime value, and continue to make improvements to the efficiency of the operation as we scale. So when you think about growing customers, it's grow more of the customers that are already in front of us as well as attract more of the customers from that pool of 40 million households. Number two is increasing customer lifetime value, retaining more of the customers that are already in the portfolio and upsell and cross-sell opportunities. And then third, continue making improvements to the efficiency of the operation as we scale, improve our productivity, continue to progress underwriting, and improve our losses and improve our logistics capacity. So as Mitch mentioned, the omnichannel opportunity. That's really how we're going to accomplish this is by continuing to build out our omnichannel capabilities centered around the customer with stronger digital, central and then, of course, the store channels. So these 3 pillars underpinned by the ongoing omnichannel development are really key to the long-term growth of the Rent-A-Center business. So I wanted to take a couple of minutes and just look at each of these a little bit more in depth. So when you talk about growing customers; first, that opportunity to convert. Remember, the opportunity of $100 million that I talked about earlier, 5 points of conversion is around $40 million to $50 million. We can improve our inactive customer conversion by 100 basis points, close to $20 million. And then don't forget the other opportunity that we have is to get better at converting the customers that are walking into our stores. More than half of the apps or about half of the apps are in-store traffic and continuing to convert those customers is critical as well. We also want to increase our e-commerce throughput by continuing to make meaningful website enhancements, reduce the friction for the customer, continue to enhance the self-service checkout and personalize the experience for those customers when they're on our website. We know that it's important also to increase capacity in our stores since they're involved in various stages of the transaction, we know that it's important to expand certain components of our centralized sales functions to lift web and non-web capacity. If we've got a large pool of apps going into the Rent-A-Center store, we know that we can optimize that so that the capacity of the stores increases across the board. And we have some intraday web support that's helping us right now. And what we're seeing is not only are we converting more of the web traffic, when the stores are able to focus on the customers that need a bit more touch, we're improving conversion there as well. So it's really twofold. It's helping us. And I want to just make sure that I reiterate this. This is centralized support; we still know the importance of the location being there for our customers. The other thing that is important for us as well is this is my day job is to continue to strengthen our local presence and elevate our store talent to drive the sales and the relationship expectations that we have, making sure that we're optimizing our store performance, surgical tactics when we find something that we need to improve. You can imagine, 2,400 locations requires some degree of touch and trying to help our coworkers just get better every single day. And then the other component of growing customers is really, I mentioned it earlier, attracting more customers. The opportunity, 40 million U.S. households in our TAM, 70% of those households are under $50,000 per year, and they're within our local market. Marketing is the other component, driving brand awareness, making sure that the consumer knows that we're out there, leveraging first and third-party data to personalize the customer shopping history, make sure that we maximize awareness with personalized offerings, make sure the customer understands our value proposition. And while we're doing that, let's highlight some new products. Let's make sure that we're constantly looking for new categories. We recently launched jewelry. I remember renting jewelry years and years ago, and I am super excited to be back in that business today. In addition to the extended aisle, continuing to put products on the site that can enhance our store footprint and give our customers more access to a lot of different products that they might not see. And then, of course, there's the partnerships and the organizational synergies, being now a part of Upbound, in my opinion, gives us the opportunity to capitalize on a whole slew of synergies to have new products and services that I can give, and our customer in the Rent-A-Center stores can have access to. So that growing customer is very excited about it. So that's the first area, focus area around converting and attracting more. So now we need to talk about what we're doing to grow our customer lifetime value once we get them. And there's really 4 points here. Number one, the opportunity. When I think about improving customer lifetime value, it's about how can we retain them. And ever since I started with this organization, we know that the transaction is very, very flexible, allowing the customer to move in and out of it as they wish. But in addition to that, it's our opportunity to help this underserved and customers under pressure, get closer and closer to ownership. So when you think about keeping one of our agreements on rent for 1 addition a week, if we do that in the portfolio, it's close to $30 million in additional revenue. So we're constantly trying to help our customer continue along the journey. The second point is continuing to enhance the value proposition, creating more flexibility in the agreement terms and customer options. I think we have a very, very differentiated value proposition, and I think that we're only going to get -- make it better. The third is providing intelligent and personalized offerings, making sure that we're looking at our pricing to find ways to be more surgical and customer focused and continue to build more of those retention offers, like I mentioned, as the first point. And then improving the customer experience. With 2,400 stores, it's critical that we create as consistent of an experience for both the web customers and the in-store customers as possible. Continuing to enhance the self-service capabilities, so that the customers can continue to do more for themselves. They can go in and manage their account themselves provides consistency. We all know, we go on websites all the time, able to manage our accounts, able to take advantage of offers and so forth, in credits. And we want to make sure that we can gamify the experience for our customers as well. The other point around improving the customer experience is we're now improving our logistics technology, optimizing the last mile experience for the customer, and that's also going to increase capacity to serve them. When you think on the other side, upselling and cross-selling is another opportunity for us. So we want to retain them. And then while we're retaining them, we want to go ahead and take advantage of what other things can we offer them. The opportunity size on that category is if we can increase the number of customers who stay on rent with us for longer than 12 months, we can improve that by 10%. It's about $50 million in annual revenue, and that's because we're adding additional agreements to our customers. In order to upsell and cross-sell, we need to personalize that upselling. We need to replicate the A experience inside of the store to our virtual customers. And I can remember that even when customers would come in, back then, it was almost exclusively payments made inside of the stores. When the customers will come in on Saturday, it was a great opportunity for me, number one, make sure they were happy with the product that they had but also find out what they might be interested in next. And it was an art. You'd watch your customers they'd come in; you'd see if they'd stop and pause at something as they're walking around the store, and you go bing, they might be interested in that. We want to replicate that type of experience on the website. And whether that's shopping, whether that's making payments or just reviewing their account. From a customer relationship sales perspective, we know who our customers are, we know what their needs are, and we know what they want. And we built a strong foundation with our CRM with Salesforce and now it's our opportunity to extract value out of that. And then finally, from an upsell and cross-sell and perspective, incremental products and services that we offer, build the bridge between customers and the products and services that they need. And Genesis partnership, Mitch mentioned it earlier, I look forward to a day where hundreds of thousands of my Rent-A-Center customers also have a General Purpose Credit Card in their pocket as well that they can use for other incidentals and things that they have inside of their life. So as you can see, there's a lot that we're able to do with the customers that we have right in front of us as well as the opportunity in order to maximize the relationship. But how we do that and continue to drive profitability in this 50-year business, is really, we want to see that with our third focus area, which is continuing to improve our operational efficiencies. And this is where we increase the productivity. Our opportunity is to scale efficiently via the omnichannel. If we can reduce and win, we can reduce our OpEx per new agreement by 1%, it's an additional $20 million in operating profit and we can shift the economics through the rising tide, centralize and digitize certain functions, like I said, sales, account management, payment support. The stores are still integral, but we do realize that there's an opportunity to centralize some of the support functions so that we can have consistent experience across the board in all of our stores. And we can be there for our customers, I've mentioned a couple of times as much or as little as they need. We know that launching new technologies is important. We're recently introducing tablets and delivery devices for all of our vehicles. So now our coworkers can improve the speed of the delivery, not speeding, but the speed of the delivery through optimized routes and efficiencies. And we continue to test new concepts. And as a matter of fact, we're here in New York City. We have a location in Washington Heights and Jamaica Queens. And both of those locations are right under 1,000 square feet. Our typical Rent-A-Center location in the legacy business, the square footage is between 4 and 4,800 square feet, but we have 2 stores here, one in Washington Heights and Jamaica Queen's under 1,000 square feet, able to have a few SKUs. A lot of digital interaction for our customers to see the extended aisle, and we still have coworkers there. So we're in a community in New York that maybe would have been a higher barrier to entry real estate costs and so forth, but we're able to be here and serve our customers. So from an underwriting and loss perspective, to continue to improve the operational efficiencies. And another thing we're working on is introducing new data -- new tools rather, data and insight-driven regulation of approvals and approval amounts, underwriting committee and constantly looking at how our underwriting is performing. And continuing to implement predictive modeling using data and an insight-driven approach to spot losses earlier. So when you think about converting and attracting more customers, improving customer lifetime value and the operational efficiencies. When you think about those things, I hope that I've made you a bit as excited as I am about the future of the business. So when you put all of this together, what does this really, really mean in terms of tangible results. And some key takeaways from this presentation is number one, we're a strong cash business. We have proven sustainable results. This is a resilient business model that is now evolving ever more into e-commerce. I want to remind everyone that we normalized after a tough back half of 2022, and I feel that we're on a good path now. I believe also that we have significant opportunity to grow not only with what we have, but with what we know is in front of us. So by 2026 for the Rent-A-Center business from a CAGR perspective and reminding you, in a 50-year retail business that generates strong cash we still expect revenue growth in the 2% to 4% range, adjusted EBITDA in the 3% to 6% range and adjusted EBITDA margins in this awesome business in the mid- to high teens. So thank you very much. Our business has so much potential. I'm extremely passionate about it. I don't want to, nor do I know how to do anything else for a living. So I'm excited about the opportunities that we have in front of us. I do look forward to your questions later on this afternoon. And I believe we're going to take a couple of minute break -- 10-minute break, and then we'll regroup here and my partner, Tyler Montrone for the Acima business, we'll stand up and tell you about all the awesome things he has going on there. So thank you very much for your time today. [Break]

I'll start over again for those that couldn't hear. Good afternoon. I hope that break was a welcome one. We've got a few things that I want to cover, and so we're going to dive right in. But I'll start with introductions. My name is Tyler Montrone, I'm the Executive Vice President of Acima. I'm running our operations. And I've been with the Acima long enough to see who it is, understand where it came from, know where it is today and know where it's going into the future, and I look forward to sharing that with you today. As you can see here, Acima started in 2013, but we didn't actually do a lease until 2014. Our operations, our organization took the time from 2013 to 2014 to really evaluate the market and understand what virtual LTO looked like. Understand the soft spots and the existing players, understanding the operational requirements, understanding the regulatory requirements, all of that sort of thing. We started from a foundation of recognizing where the market was and where it could go before we ever tried to issue our first lease. In 2014, we started issuing leases. We -- like any other startup, we encouraged ourselves to fail fast and then to learn from those mistakes and move forward, and we did. So at that point, we migrated into 2014 with the learning lessons and the operational lessons 2015. We got our first investment from outside VC. And at that point, we had all of the ingredients with -- aside from some of the leadership team members, we had all of the ingredients necessary to move forward. So our founder, Aaron Allred, took the opportunity to go find himself the right management team, the right leadership team in order to help them succeed. I came on in March of 2016. And at that point, we had our sales team organized. We had our capital. We were well positioned to move forward as a company intending on taking this marketplace by storm. And that's precisely what we did. We were a very scrappy organization. And for all of the investors in the room, you recognize that scrappy always comes with a parenthetical below it, resource constrained and cost conscious, right? And we were no different. My first office with Acima was a janitorial closet. We had our meetings in the hallway out in front of the elevators because we used every single space we could in order to put the right people in place. We wanted to save money, we really wanted to make a run at utilizing the resources that we had for the actual leasing activities of Acima and most specifically for our investments in our underwriting. As we moved into 2018, 2019, we took off like a rocket. It was everything we could do to keep up with the growth that we had around Acima. I started when we were doing about 800 leases a month. By the time we landed in 2017, we did 10,000 leases a month. By the time we -- by the time we were into the '18 and '19, it's 50,000, 60,000 per month. We land Wayfair as an enterprise customer. And we learned all the things that we didn't know. We didn't know about e-commerce and about how you work with an enterprise relationship and the things that you need to build out internally in order to make that work. So we go and we build that stuff. And we work hard to keep that relationship active and viable and running on all cylinders. And at the same time, trying to innovate our platform in order to handle both the small and medium-sized businesses that have got us to that point, and continue to carry us into the future. But also to work with some of the larger enterprise accounts that are going to make the world a difference from a seamless perspective as it expands into the next phase of its existence. In 2021, we were acquired by the Upbound Group, then Rent-A-Center. So you'll hear me accidentally call it Rent-A-Center from time to time, but it's truly Upbound. We're acquired by the Upbound Group. And now we have an entirely new set of resources available to us. We have all these shared services. We've got -- as we've talked about here, we've got 50 years of expertise with this customer. We have extraordinary resources from the perspective of marketing and of digital experience transformation and of evolution. And we can take all of those and we can start putting all of that together with our platform and our ability to innovate quickly based on the technology stack that we have. And we can develop new products, things like our ecosystem and our virtual lease card and our unintegrated retailer processes. All things that we'll talk about later, but things that can truly be transformative to this market. That takes us to 2022, 2023. We exceed 1 million app downloads in a very short period of time. We have a remarkable returning customer base. We have a phenomenal platform that allows for customizability both from a retailer and a customer perspective. And we're in a phenomenal place from the perspective of future growth. So let's talk about where we really are today, right? In 2022, we purchased, Acima purchased $1.6 billion of product for purposes of leasing to consumers. We leased that to 1.5 million unique customers. And we did that across 31,000 small- and medium-sized business locations. Filtered in with a number of larger locations as well, but 31,000 locations nationwide. And we're barely starting to chip away at the iceberg here in terms of our true potential. We have all kinds of availability. The heat map, I like this heat map because it looks like we're prolific across the state -- across the country, right? But when you think about the fact that we're engaged with 31,000 retail locations, and there are, in fact, 450,000 retail locations out there for us to start working with. All of a sudden, you recognize the true growth that's available to Acima. If we can really put everything towards engaging with those retailers and providing them the solutions that they need, when they need it and how they need it because every retailer is different. So let's break this market up just a little bit. Let's look at how we look at the 106 million available consumers, the 450,000 locations and then the $45 billion to $55 billion TAM. We've shown this information to you at various points throughout the presentation so far. But we thought it would be a good idea for me to take a moment to sort of walk through this with you and show you how we got here. If you take the overall durable goods market, which is roughly $602 billion and you take our customers, which represent roughly 106 million customers and you look at their average purchases, you can back into that $45 billion to $55 billion TAM. But we looked at it in another way as well, just to make sure that we were still on the right track. We took the retail locations as well, and we looked at the average productivity from a leasing perspective of each retail location based on its size within the marketplace, and we arrived at roughly the same place. Arguably, we might be a little conservative, but we thought that was better rather than being terribly aggressive and arguing for some remarkably outsized TAM. But that's how we get to $45 billion to $55 billion. We looked at it from both perspectives, the retailer perspective and the consumer perspective. Why would we do that, right? From Acima's standpoint, and the way that Acima is built, it's built because it services 2 types of unique customers, retail locations as one type of customer and consumers is the other. So let's talk about that a little bit. When we look at our platform and how it enables the various connectivity or how it solves the problem, what is there to do? It's there to allow retailers who have credit decline customers within their workflow today. It's there to allow them an easy, straightforward, simplified process of converting that customer from a decline sale and lost revenue into actual revenue for that retail location. And it's designed to be navigable by anybody from the store associate, clear to the CFO, CEO of that company because an often, in most cases, as you're well aware, at that retail location has maybe limited operations. They've got 1 person who's trying to purchase, sell, manage customers, take care of back-office activities. They don't have time to really mess around with all of the financial overhead that comes with a financing platform or a lease-to-own platform either way. And so what we try to do is we try to create something that would make it extremely easy and intuitive for them to walk their way through the system, not be burdensome on their day and allow them to get that sale and move on. We do that by engaging directly with the retailer but also engaging with the customer. This is where our platform pulls the two together, right? It allows for us to work with customers and allow the customer to input information into our platform, obtain the approval decision, attain the decision and plug in whatever it is that they're looking for from a property perspective, and move forward and close out the transaction. It also allows the retailer to help facilitate that. We did it that way. We approached this value proposition that way because we want to meet both customers and retailers where they are most comfortable, right? You've got to make sure that you explain the transaction. You've got to make sure that the customer understands what's happening within a leasing environment. And so we had to build something that was very understandable, very readily recognizable, very readily navigable. But we also had to make sure that it was explanatory that it was educational in nature. And we did that side of it. The other side of that is it's got to connect to the retailer and the retailer needs to meet them where they exist. Are they sophisticated? Are they not sophisticated? Do they have the technological resources to implement our platform or not? And we built it so that they can do that with very simple plug-ins. They can do that with a very simple APIs if they do have some sort of IT department or sophistication on an integration perspective. All things considered, our platform was designed with both customer and retailer, mind it where they live. Now as we dig into this a little bit further, as we dig into what we mean by that, we built a true omnichannel experience for customers. You can engage with me online through a traditional URL. You can engage with me on your cell phone through either our mobile app or unintegrated through a text to apply, which is our invention. And the QR code application, which was also our invention within the marketplace. You can engage with us in store, walk into the store, start talking to the retail associate. They can start the application and then you'll finish the actual transaction on your cell phone. We can engage with you as a customer any way that you're most comfortable. And we do that because we recognize that everybody is just a little bit different. Some folks like that personal touch. They like to be able to look at the property and understand exactly what it is before they make their selection. Others are perfectly happy to engage in an online transaction and move on. And we can help both of those customers, however they see fit. Now from a retailer perspective, we want to make sure that we can assess the retailer in the manner that assist them as well as it can. And we do that by offering various service models. We have a purely virtual service model. That's where Acima started, right? We started with just a web application that everybody could log into, everybody could utilize from whatever equipment they had, tablet, in-store computer, you could actually do it on a cell phone early on, although quite honestly, that experience needed to be improved and has been to this -- to date. But nevertheless, we had a virtual platform. With the acquisition or -- by Upbound, we now have the opportunity to do some extraordinarily unique service models. We can staff high-volume stores, which is a differentiator and it creates an extraordinary moat around particular large, high-value relationships. If the staff -- if the store isn't quite large enough to have a staff in it and it doesn't have quite as much volume and have staff in it, but the aggregation of locations amongst that retailer do, we have what we call a quarterback model or a hybrid model. You have a floating staff that bounces from store to store, making sure that they can take care of the needs. They're always available. They can help store associates work their way through approvals, origination processes, servicing matters, that sort of thing. But we've got both of those. And then we have our true just online, your traditional URL and mobile app. So what I'd call that is non-store interactive discussions. We can service the retailer anyway that they like. We can provide them any of these models that they like, assuming, of course, that from a staff perspective, they've got enough volume. Now from there, you take a one step down in that. As I mentioned before, you're working with a bunch of retailers that are trying to wear a lot of hats. And many of them have built an e-commerce site on one of the names that you see up here, Shopify, Magento, WooCommerce, so on and so forth. We've integrated with all of those as a plug-in that makes it extraordinarily easy for them to walk into their platform, turn us on as a payment solution or as a leasing solution within their platform. That could be done in a matter of hours in most cases. If you've got somebody who knows what they're doing. And if they don't, we can help them walk through that process. And we have support for that. We've integrated with a number of waterfall partners, ChargeAfter, Versatile, STORIS, Synchrony, so on and so forth. These waterfall partners allow that transaction to process from top to bottom, providing all of the financing solutions to a particular customer, and make sure that the customer understands which financing solution they're receiving, whether that's a lease or it's a traditional credit instrument. From there, we've also created marketplace activities. And I'm going to spend just a moment of time here to truly explain what this is. I touched on it in an earlier slide, but I think it warrants it here. We created -- we were the first to truly create a marketplace that allowed for a couple of different variations in transaction. The consumer -- the retailer, pardon me, can host their product on our site if they wish, if they don't have a relatively robust e-commerce solution themselves or if they do, we can link them to our marketplace. It gives the retailer expanded scope and it presents them to the millions of customers that we have inside our platform today. It gives them the opportunity in a very easy and integratable fashion to control their online transaction value with Acima. In addition, we've connected that marketplace to our mobile app. So now anyone of us that's got it downloaded on their phone today can shop online in our marketplace utilizing your cell phone, pick up property and complete from beginning to end that origination experience and that transactional experience, utilizing all of the devices that we carry around in our pocket. In addition to that, we ran into a scenario where we found that retailers often have the desire to work with us, but do not have the technological resources to devote towards the integrations. We, as a result of that, created a virtual lease card process that allows us to work with unintegrated retailers. And what we mean by that when we talk about unintegrated retailers, it's not that this retailer doesn't want to work with us necessarily, it's just that the front-end and back-end processes are not integrated from a technological perspective. The virtual lease card gets us around that particular hurdle by allowing us to continue to fund the retailer, utilizing their traditional payment rails, but still allows the customer to lease the product on the back end. Now, in that scenario, we work out a series of API calls typically with the retailer, and we can see when delivery is made. We can see when returns are made, that sort of thing because those APIs tend to be open. But this gives us the opportunity to integrate with that -- to work with that retailer in an unintegrated fashion, whenever the retailer chooses but doesn't have the technological resources to devote to our particular transaction. And that's game changing when you think about the number of large and medium-sized businesses out in the country today that truly are looking based on macroeconomic factors for additional sales. Aside from that, we have best-in-class customer -- customer support and retailer support. We really looked at ourselves when we were creating our solution at Acima. We really looked at ourselves as if we were a service-oriented company, right? We were going to win in a market that had some relatively strong incumbents by being the best-in-class service to our retailers and the best-in-class service to our customers. And I believe that we still achieve that support level today given that we have less than 1 minute hold times within any of our customer-facing servicing departments. And we have substantial mechanisms and means of working with and solving issues for our retailer group. So let's talk about the customer experience, again, and we'll do this in a little bit of a quick manner because most of this stuff -- I talked about the fact that we have a mobile app. I talked about the fact that you can go through and you can originate all the way through to service your lease using our mobile app. You can actually even start the returns process through our mobile app. Should you decide that you no longer need the property. A key feature, a key differentiator between us and many of the other financial solutions in the marketplace. All of that can be done through our mobile app in a clean, simple, easily understood manner that gives the customer true control over their leasing experience and gives them the knowledge and education necessary in order to make it a meaningful experience. And what's interesting about this is we drive extraordinary return customers based on the experience we have in our mobile app. 30% returning customers, and almost all of them come back through this mobile app based on its simplicity and ease of use. As part of that, I think it's important for us to -- for a moment, talk about the lease itself and how it operates. Just to make sure that everybody here understands what that economic transaction looks like, and what the customers' options are within it. So a customer within a leasing transaction has, at all times, the opportunity to return property, whether it's because they no longer need it anymore or maybe it's because it's something that they can no longer afford and they recognize that. Maybe it's just that they needed it for a short period of time, and they've surpassed that use and now it's time to bring it back. In any of those scenarios, returns are always possible within Acima's environment. But if the customer chooses to exercise an ownership option, we have 3 of them along the way. The first is to exercise an ownership option within 90 days. This tends to be the least expensive option. The second is to exercise an early purchase option after the 90 days, but before the full term of the lease. A customer in that scenario is going to pay on average, 65% of whatever the remaining lease payments are on that lease. And the third is to exercise or rather to make all payments agreed upon in the lease and at the end of which ownership transfers to the consumer, right? This is the traditional leasing model from a LTO. What's interesting is if you compare that to alternative options, say, credit cards available to these consumers or maybe not even this consumer, but the consumer and the tier just above them. Our costs are not all that different. You can see that we're within a stiff put of, say, the credit card within that 90-day period of time. And I'd say that we're doing pretty well if you look at the average payout over time on a long term card. Let's talk about the merchant experience for a moment. When we get to the merchant experience, like I said, we meet them anywhere in any way they want us to. Whether it's through integration, whether it's through Shopify plug-ins, whether it's through integration within their POS system, we'll do anything. And we've got the technical capability and the resources in order to make that happen. But more than just how you integrate with them, it's all the resources you provide to them in an effort to make sure that they understand the transaction as well. We provide them training on demand. They have self-service marketing order materials. They have the ability to transact using multiple platforms if they wish. And at the end of the day, that drives reengagement on the retailer level as well. Now all of a sudden, the retailer has the ability to start helping customers understand their true options at the moment where the customer recognizes that they may not be within a traditional credit offering environment. And this helps drive loyalty from retailers that helps drive loyalty from customers. Now the retailer gets to be a partner to the customer and providing the services and products and things like that, that the customer requires. And from our perspective, we get to help that retailer understand what the true value proposition is. So that they're more comfortable in the introduction of the customer to Acima. We've gotten so good at making sure that we can explain this transaction to retailers. And we've refined our process here so well that even despite all of the macroeconomic forces at play in 2021 and 2022. We continue to grow our retailer network. And we grew it as well as we did in the years before. What's interesting about that is the demand softening that we see out in the marketplace today. We also hope rather that, that's a temporary problem, right? And as that alleviates, as those macroeconomic factors start to alleviate and start to return to normalcy, what we've done is we've positioned ourselves for extraordinary, accelerated growth because now we have more retailers engaged, we've got more time to explain the transaction to them, we've gotten them more comfortable with what the leasing transaction is and how to explain it to customers. And at the point where those customers start to come back into the stores, now we have the ability to truly make a great run at converting those customers into actual leases. So though you see falloff in customer -- slight falloff in customer into 2022, though you see slight falloff in GMV growth into 2022. At the end of the day, this is a blip. And we're going to see a remarkable return based on just the fact that we've been able to increase our retailer base as much as we have throughout the last year. So let's talk about the retailers that we work with. Now traditionally, LTO works very well inside furniture, appliances, electronics wheels and tires. Acima ventured out into jewelry, it ventured out into eyewear. There's a whole host of verticals that we now deal in, and have become relatively sizable portions of our ultimate distribution, and they did so very quickly. That gives us a very -- an insulated and distributed base, whether it's holiday seasons, whether it's kind of the slower retail season through summer months. We've got some insulation because we've differentiated our retailer base relatively substantially. In addition to that, what we're now focusing on is distributing our online versus in-store activities as well. You can see over the course of the years, how that's rapidly starting to grow and how we expect it to grow even further as we refine our processes after the onboarding of Wayfair. You can see when we brought Wayfair on our e-commerce transactions, we're relatively immaterial. But as we started to refine those processes, as we started to understand what those look like, our focus is on making that e-commerce transaction, every bit as meaningful, every bit as enjoyable. every bit as personalized as an in-store transaction. And we're starting to make a lot of headway in that regard, especially under Sudeep's guidance. Our distribution throughout those various verticals is allowed or is afforded to us by virtue of the fact that we have worked so hard to perfect our underwriting. Almost all of that investment in those early days. The reason I sat in a janitor closet instead of having an office, so the reason we had meetings in the hallway instead of having them in a conference room, is because we wanted to redirect that money into our underwriting and make it best-in-class. We wanted to make sure that we were making great decisions and we were able to make those decisions quickly. We aggregate thousands of data points across dozens of providers in seconds in order to make decisions, and we do that repeatedly throughout the day, thousands of times per day. We wanted to make the underwriting granular. We wanted to make sure that we could tailor it to a particular industry or a particular product. We wanted to make sure that we could tailor it to a particular environment if we had to, whether that's e-commerce or in-store so that we could really push the limits of what we could accept from an underwriting perspective and make those good decisions. We wanted -- we made sure of the fact that our underwriting was proprietary. It had to be ours, right? And the reason it had to be ours is because we didn't want to be in a situation where some data elements, some data piece within a provider, say one of the big 3 providers was ever degradated and rendered useless and that would affect our underwriting, and it would take us months, if not longer than that, in order to recover from it. So we made sure it was a proprietary system that gave us control, understanding, insight and flexibility. And then we also wanted to make sure that was governed. And this has only expanded since we've been acquired by Upbound. We now have a very diverse group of individuals with deep subprime experience monitoring this, I monitor it daily. Others with me, Fahmi will talk about his daily monitoring of it here shortly. But we monitor it daily in an effort to make sure it's doing what we expect it to do. And we meet every other week in order to make sure that we can go through those results and see those predictions and make sure that they look exactly like what we need. We do an extraordinary amount around the underwriting, and that's because unlike Rent-A-Center, we're buying at retail. I don't have all of the margin inside my transaction to make a mistake and recover from it. If I make a mistake, it's a generally costly one. And so I've got to be as good as I can be from the perspective of underwriting in an effort to make sure that I make the most out of the margin that I have after the retail transaction. And our results demonstrate that we've done pretty well with it so far. We make pretty good decisions almost all the time. If you look at where we were at in 2021, now I say we make pretty good decisions all the time. I'm going to show you where we had to tighten extraordinarily in order to react to markets. And I know that, that's a little tongue-in-cheek, but I think everybody had to, so I'm going to go ahead and take this as a win anyway. We did it early. But the idea here is that, in 2021, we had just launched that unintegrated experience. We just launched marketplace. We were doing a number of different testing initiatives. We were trying to understand what that market looked like. In addition to that, you had all the macroeconomic factors that came into place, cessation of stimulus, inflation, those types of things. We could have continued on down the road of demonstrating growth. We could have slowed this down. We could have done all of those things. We could have waited to see what was going to actually happen. But our underwriting and our gut and our experience told us tighten early and do it now and take the pain now and understand it. And we did. And what that allowed us to do was come to a place where we didn't have massive loss rates in time periods within 2022 when others were struggling quite a bit. And it allowed us to amass the cash that we talked about, Mitch mentioned it earlier on. It allowed us to generate significant cash flows that could then be deployed as soon as we started to see turns in the market, things that we're going to -- signs in the marketplace anyway, that things were improving, increased demand, return of customers to store fronts. As you can see here, we've done that. And now we look to start cycling over second half of 2022. And we're able to make more aggressive decisions. We're able to make more thoughtful decisions. Managing risk and managing the outcomes as we have always done and as we will continue to do in the future. So we've talked about this a little bit, and you've seen the 450,000, 106 million customers, and then we've talked about the TAM. But what does Acima represent inside each one of those? Well, from the perspective of the TAM, Acima is roughly 3% to 4% of that total TAM today. With respect to the 106 million customers, we're about 1% to 2% of that today. And with respect to the 450,000 locations, we're about 7% of that today. And we know based on all of those -- all of the discussion we've had so far that, that is only going to grow as that demand returns back to the marketplace. As we start seeing those customers flood back into retail stores in order to make purchases, as inflation normalizes or even starts to reduce some as customers are no longer quite as concerned about all the other things that are going on in Washington, maybe even today. They'll recognize that they can spend a little bit more. And as they do, we'll be well positioned in order to exercise on that and well positioned for growth. So let's talk about that because growth is really what we wanted to touch on today, what we really wanted to express to you today. We've got 3 priorities, 3 strategic priorities that will enable growth. The first of which is to grow our retailer base. And we've been doing that, we will continue to do that. But what we've recognized is that we can do that substantially more strategically. Given our size, given our distributed network, given the outbound experience, and given the synergies between Rent-A-Center and Acima, we have an extraordinary market that we can dive into, and we can be more targeted with the retailers. We can provide value to the retailers, not just from the perspective of being a solution for under-served customers. But also by being a partner from a Rent-A-Center acquisition perspective or a product acquisition perspective. And those things give us a lot of strategic advantage. We can expand Acima into new verticals. And that's always an exciting and interesting prospect, having done it a number of times so far, whether it be with jewelry or cell phones or eyewear. Those verticals often significantly surprise and outperform what you think they will, and we look forward to what that expansion looks like. And we can enable more of those partnerships like we talked about, whether it's on the buy side, whether it's on the leasing side, we can enable those partnerships that can really start to transform Acima from just being a -- from what it was in 2017, which was primarily a transaction, to being a payment solution for our customers. And this is going to be critical as we step into the next slide, but I want everybody to kind of think through that for a moment. We're no longer just looking at this like we can facilitate one transaction. What we're doing now is we're transforming via Upbound and via our connectivity and our resources. We're transforming ourselves into something that allows us to be more than just that incremental transaction for that customer. We're doing that, utilizing these tools, utilizing the unintegrated virtual lease card, utilizing the marketplace, utilizing the app. Now all the sudden that customer has a lot of choice with respect to the product that it can go select and a product that it can work with. As we think about increasing the growth from a retailer perspective, we also look at increasing the lifetime value for the customer. And I've touched on that, and I told you that this slide was coming. And so let me take a moment to really kind of explain this. Mitch mentioned a flywheel earlier in his presentation, and that's certainly the way that I think about this particular slide. We have the option of dedicating resources to bringing in customers which we can then direct towards retailers for purposes of lease transactions, improving our relationship with those retailers as we do so. And actually converting those customers into lifetime customers by demonstrating value or -- and I say or not necessarily as if it's in opposition to. Or we can engage with our retailers and bring on more retailers, which will send us more customers. In either scenario, what happens is we start demonstrating or start generating a lot of momentum from the perspective of reengaging with customers, making the retailer relationships stickier and producing more value. Returning customers tend to be better customers at the end of the day. They understand the lease transaction. They understand the value of the lease transaction, and they want to continue with that. So creating unique value propositions for those customers that make them interested in coming back and working with us more. 1 time, 2 times, 5 times. That's the goal of Acima going forward. As we do that for the customer side, making sure that the retailers can see and understand the value of the proposition, understand the value of those returning customers. That's a major focus for us. And we want to make sure that all of the digital experience work that [ Ann ] does and all of the remarkable marketing activities that our team does. All of that flows into making that retailer understand that we're not just a vendor, we're a partner. And that's truly what takes us beyond just being one of the other LTO companies that's out there. What we really want to do is continue to execute on that core principle that we started with. That idea that we're going to be the best partner, the best service provider in the industry. As we do that, we have to pay attention to making sure that we're still providing, still improving on profitability, still managing risk. So we're going to consistently look at our risk profile. Like I say, that underwriting group, the risk team that we have and the underwriting decision engine that we have, it's constantly evaluating itself in order to change given current economics. It's constantly evaluating itself in order to make sure it's making the right decision based on all of the inputs it has today in the macro environment today. And we'll continue to do that. We'll continue to invest in solutions that reduce fraud. We'll continue to invest in data and technologies to help improve that process. We'll leverage the extraordinary experience of Upbound in order to improve our processes. They've been running centers of excellence throughout the country for 50 years now. It's -- we keep saying that at some point, someone can say, enough with the 50 years thing, and I don't blame you for it. But they do have that extraordinary expertise, and we're going to leverage that in order to improve those efficiencies. Tiffany helps me with that every single day, and her ability is outstanding. We're going to enable automation in order to trim costs and we're going to work with Rent-A-Center and the pickups that they have in an effort to make sure that we're monetizing the value of the property that does get returned. Such that no longer is the retail aspect of my purchase as painful to the business as it could be. Now all of a sudden, you get to leverage that product in additional returns and in additional leases. And then as always, because Fahmi make sure that we pay attention to, we're going to execute cost-cutting strategy and containment strategy. We're going to continue to be scrappy, right? And it's not because we're resource constrained like we once were. But because that's a good mentality for any company to keep in mind, especially as we've seen over the last couple of years. Now all of that is what we're doing today, right? That's everything that we're talking about today. But I want to talk about some of the things that aren't baked into our overall model because we look at these as additional opportunities, and we look at these as things that really can drive value above and beyond what we've already modeled out. First, let's talk about the retail card and we'll do so quickly because you've heard about it a number of times. But think about the power of being able to provide 1 point -- or pardon me, 2.5 million customers with a general purpose credit card for their everyday purchases. Think about the stickiness that comes from being in a retailer and having the opportunity to work with one of the best-in-class providers from a subprime perspective, and an LTO provider and have 1 integration, have 1 platform that you're working through. Think about how that can really transform both the retailer, the 1 customer's engagement as well as the customer's life, right? And how powerful that can truly be. At the end of the day, when you start thinking through how those two things start working together and how that improves that flywheel that we just went through. The opportunity with the Genesis partnership is truly understated. When you think about what that looks like just from the perspective of small- and medium-sized businesses, that's one thing. But as you carry that experience over and you start looking into the enterprise relationships and the effect that, that can have on enterprise relationships. Well, we've now got a scenario where my friend, Mike Bagull here, he's got a -- this is the leader of our enterprise sales team. My friend, Mike now has all of the tools at his disposal in order to go sell additional big names. I mean, Ashley is the biggest furniture manufacturer in America, and that's ours. Maybe even as Mitch mentioned out, one of the biggest in the world. We work with them in a very close relationship and we'll continue to do so. But imagine how sticky the Genesis -- the Genesis-Acima relationship becomes when you start talking about some of the other major retailers in the space and how all of a sudden, resource constraint isn't as big a deal when you can integrate to 1 platform as opposed to 2, right? So what does that all lead up to? What are we -- I've sort of danced around it a little bit and now get really pointed in my closing remarks. There's a large untapped market. We've shown you that a couple of different times. We've talked to you about that a couple of different times. And we truly believe that, that large untapped market is one that's attainable, one that's reasonable and one that we are uniquely positioned to take advantage of today. Our platform emphasizes the customer and the merchant experience and it does so because in an effort to get to that large untapped market, we have to continue to push ourselves to be that best-in-class experience, and we will do so. Then finally, we have all of these optimization efforts that are out there. Anthony talked about just some of the value that comes out of his optimization efforts. Imagine being 10 years old as opposed to 50 years old, I know I promised I wouldn't continue to say that. But imagine being 10 years old, and being able to take advantage of all of the optimization efforts on our side in order to help drive additional margin expansion within our group. All of that leads to GMV, but in the double digits, revenue growth also in double digits and adjusted EBITDA between 8% and 12%. Adjusted EBITDA margins in the low to mid-teens. If we can execute on all of those strategies, we have supreme confidence that we can based on the dynamic nature of our team, based on the unique experiences of our team and based on the fact that we are a great team. All of that is easily -- somebody's going to say not easily. All of that is attainable. Now I'm going to pass it over to Fahmi so he can walk you through exactly what that looks like, but I very much appreciate your time today. Thank you very much for having us, and thank you very much for letting me speak.

Thank you, Tyler. Good afternoon, everyone. My name is Fahmi Karam. I'm the Chief Financial Officer of Upbound. And unlike Tyler, Mitch gave me a real life office, on my first day on the job. I did start just a few months ago in the fall of last year. I came over from Santander Consumer, where I was the CFO there for the last 3 years. And for those of you who don't know, who aren't familiar with Santander Consumer is one of the largest auto finance companies in the U.S., focused on the nonprime sector. So not surprisingly, I've been able to leverage my experience there in Santander Consumer here at Upbound over the last few months. So I know the consumer, I know the nonprime consumer, and I spent a lot of time at the bank, at SC, really focused around the pricing function and the risk function. And it's been great to be able to leverage that experience so far at Upbound. So one of the important things that I looked at when I was joining the Upbound team, what drew me to join the team was the potential, I believe that the company has to continue to evolve and really grow the business, both from the Rent-A-Center side as well as on the Acima side in our 2 core businesses, and through that really create value for our shareholders. That opportunity stems from a compelling business model in a really compelling market dynamic. And each of our businesses have different qualities and different growth opportunities that we're going to achieve. It really starts with the Rent-A-Center business. So Rent-A-Center is a large and stable business, really rooted in a really strong customer value proposition. Think of it as a large, profitable, significant cash flow generating business. It's really a free cash flow generation engine. And it's been proven out for the last 50 years. As Tyler mentioned, we've mentioned that a few times today, but it's proven out through several cycles and continue to have growth opportunities. When you think about Acima, Acima is our growth engine, also very profitable, also generates a lot of free cash flow, but it's a little bit different than the Rent-A-Center business. So Acima is asset light, doesn't have a lot of inventory to manage like a Rent-A-Center does. Does low fixed cost, doesn't have the store and the footprints that Rent-A-Center has, but has a very high ceiling, has a lot of growth opportunities in the market to go out and achieve. So you put all that together, what you get is a combination of 2 companies that is very stable and generates a lot of cash flow through a lot of different conditions. And we've been able to do that with the Upbound brand to bring in a lot of the best practices and the best shared services through both of them. It has above average top line growth, as I mentioned, generate significant free cash flow and provides optionality for us to add on markets and different products, as we've discussed earlier today. And this profile of the 2 businesses together really allows us to service our 2 main stakeholders, consumers, and the retailers in a very unique way. And I think you've heard a little bit about the different aspects of our business. We think that's a key differentiator for us. And I'm not sure that it's very well appreciated by the market today. So the strong fundamentals of the company that I just went to has translated into financial results. If you look at revenue, cash flows and EBITDA over the last 4 years since the company has been really turned around since 2018, you've seen tremendous growth. Mitch kind of skipped this part in his time line page. But when he came back to the company in 2018, and the team that was there at that time, what they've done to turn around the operations and turn around the profitability of the business has been phenomenal. And it really positions us to continue to grow the business in 2024 and beyond. So like many other companies, the pandemic and the stimulus programs had a lot of volatility in our financials. Throughout 2020 and 2021, a lot of consumer-facing companies, including Upbound group, really saw unprecedented growth and really low losses driven by those stimulus programs. That profitability and those gains in the portfolio were unsustainable. And so we saw that drawback and that reversion back in 2022 in our financial results. But even without that, if you look at the financials here from where we ended the year in 2022 and compared to 2019 prepandemic levels, we've seen a lot of tremendous growth. On a pro forma basis, EPS has grown about 18% on a CAGR basis between 2019 and 2022. So one of the reasons why we have strong fundamentals and strong results is the compelling economics of a lease-to-own transactions for really our both of our core businesses. I'm going to try to get out of your way so you can see screen. But due to the flexibility of the lease-to-own transactions for our consumers, there are several outcomes that could happen with a lease. And based on those different outcomes, our return profile can be a little bit different. So we tried to bucket those outcomes into 4 main buckets. The first of them being same as cash, the early buyout option that Tyler mentioned. At Acima it's about 90 days and Rent-A-Center is 180 days. The second bucket we bucketed it into was charge-offs. The third, the early purchase option and fourth going full term. So when a customer typically will do a same cash option, the way to think about that is they're basically going to pay retail price and with the small transaction fee. So for us, that generates a very modest return profile for the business. As the consumer stays on rent longer, our profile or our return profile then grows. And so the customers that go full term, obviously, or has the highest return profile for us. So a few things to kind of take away from this chart. I think the first thing I would point out is how few customers go full term. We that's important because it kind of demonstrates how the consumers interact with us and take advantage of the flexibility of a lease and the flexibility of an LTO transaction. Most customers use us as a way to structure payments in a manner their budgets can fit and how their cash flow spending and how their habits fit their lifestyle. The full-term option, especially is low on the Rent-A-Center side when you compare it to the EPO column, as you see a big drop off from EPO down to full term. And that's because if you think about Rent-A-Center, weekly payment is pretty low, as you get closer to the full term, it makes a lot of sense for those customers to go ahead and take advantage of the EPO percentage off of remaining payments and go ahead and purchase it -- purchase it early. So in the aggregate, our lease outcomes are generally profitable even on the charge-offs. On the Rent-A-Center side, you can see because of the wholesale pricing that Anthony walked us through, it's still profitable even on the charge-off level. And even on Acima, it's just a modest loss during the charge-off period. It's interesting how -- to know also how the consumer kind of interacts between the 2 channels differently. So higher mix of EPO at Rent-A-Center business compared to Acima, which is indicative of how people use Rent-A-Center. They're looking for an affordable solution to a product that they need. On Acima, you have the majority of the customers going same as cash, which also makes sense because they view it as a point-of-sale financing solution. When we look at the same as cash percentage at Acima, during our last quarterly earnings call, we talked a little bit about how we started to see the consumer behavior, the payment behavior change in the first quarter given the muted taxes and what we said that, that impacts our margins pretty greatly. We saw a big jump up in our gross profit margin. And we think this chart kind of demonstrates why. So you're taking the folks that typically would have been the same as cash, and you're moving them over to the right-hand side. Now not all of them will be in the EPO or the full-term bucket. Some of them will get to EPO in full term, and you can see the difference in our return profile. But even if they end up in the charge-off bucket, if they make 1 or 2 extra payments given that they're same as cash, they are usually our better credit customers, they're going to make 1 or 2 extra payments. You start shrinking that gap between our returns and our breakeven point. But in general, very profitable businesses on both sides. One other thing I'll point out on this slide is the charge-off column at Acima. We think this is a huge opportunity for us. I think Tyler mentioned a little bit about the account management practices and being able to leverage the Rent-A-Center infrastructure, leverage the best practices from a collection standpoint that the Rent-A-Center has fine-tuned over the last 50 years. If we can find a way to efficiently help customers return products or more efficiently return products to the Acima, that gap between below breakeven start to close, it starts to look more like the Rent-A-Center side. So again, both units have similar economics from a standpoint of very -- very profitable. Rent-A-Center being in the mid- to high-teens from an adjusted EBITDA standpoint and assume it being low double digits to low-teens. Another important factor, and you guys have heard us talk about this, it kind of differentiates LTO and Upbound specifically, is that we do well in kind of any macroeconomic condition. And the business is countercyclical, and we talked about that as the form of trade down. So what we've tried to do here is kind of depict a couple of different scenarios, kind of normal credit conditions as well as both the trade up and trade down environments, good condition and strong conditions and weak conditions. And to provide some context to that, I do think it's helpful to consider a waterfall and how the consumers go about buying these goods. They typically go down from prime to near prime to subprime all the way down into the deep subprime where people don't have a credit score. And for the most part, the lenders that -- the traditional lenders that service these different buckets, there's not a lot of crossover, maybe a little bit on the margin but everybody usually stays true to their segments. So what happens in a strong environment. So this chart over here on the left-hand side, in a strong environment, credit profiles generally improve. And so you'll start having the prime lenders dip down into the near prime bucket as the near prime bucket starts to trade up in a strong environment. And it kind of works its way down the line. Near prime doing the same thing and also for the LTO providers as well. We start dipping down a little bit deeper. We're able to maintain our portfolio, grow our portfolio because we're going to have a new set of customers. We're going to have our core customers also stay on rent a little bit longer. So you're going to have a higher portfolio and you're going to have -- maintain decent losses in a strong environment. In a weak environment, you kind of see the inverse of that. It really works the same way. So in a worse environment, you start seeing the trade down. Think about it as a typical economic recession, high unemployment without the spike of inflation that we've seen this past time. And it could be higher forecasted losses. It could be higher interest rates, where their cost of funds have gone up, but whatever or the combination of the 2. But whatever the circumstances in a weaker economic condition, the prime lenders will definitely tighten up. And so they'll make some of those consumers in the prime bucket drop into near prime and near prime into the nonprime bucket. And Mitch referenced this a little bit. When in an economic downturn from an LTO perspective, we have a little bit of flexibility on our side depending on what we're seeing in our portfolio that day or during those conditions. What we're seeing in our core consumer to either keep the bottom end of our buy box the same or we do what we've done today, which is actually lifted up a little bit given the current economic conditions, are really hard on our core consumer in the deep subprime space. So we've actually had to lift ourselves up. And in that environment, what happens in the top end of the funnel, we start seeing a much better consumer come into the funnel and our losses actually go down. We saw that experience in 2008 and 2009 during the last financial crisis when Rent-A-Center, their portfolio did drop a little bit, but not like other consumer companies and losses actually improved as we had more and more near prime consumers come into the LTO space. So we felt like this was an important page and an important topic for those of you who are new to us and maybe new to the LTO space. To really point out that we are -- we adjust based on the macroeconomic conditions. And this is a differentiator for upbound, right? We can maintain our portfolios in both good and hard times, we can maintain our losses and really our debt, can adapt to any market conditions. Okay, so we've talked a little bit about some of the fundamentals of the business and different fundamentals of the aspects of why we think it's a compelling investment opportunity. Maybe let's switch gears a little bit now and talk about the recent financial performance and why we think we're positioned well for the future. So for the past few years, we've talked a little bit about it already through the pandemic and the stimulus era. It has created a little bit of volatility in our financials, higher demand, higher retention rates and really low losses from Q2 2020 through the fourth quarter of 2021 and into the beginning part of 2022. And through that era, I think simply stated us like most other consumer companies probably overearned in 2020 and 2021. But after the stimulus programs ended, the business started to normalize, then we had the high inflation kick in, in early 2022. And we started to see really high losses come through the portfolio, beginning with Acima in the first half of 2022 and then the Rent-A-Center side in the second half of 2022. The impact of really the spike in inflation really hurt our consumer, being targeted around non-prime and deep subprime consumers, really hit them harder than most consumers given they already have tight budgets and inflation really spiked up in all of their essential goods. So we had to adjust our underwriting. They had to adjust how they manage their budgets. And that process has really continued into 2023. We do expect 2023 to be a trough year for us as the portfolio has come down from 2022. Losses are improving but are still elevated compared to normal times. So there are some headwinds out there in the market. There's still a lot of uncertainty, but we are starting to see some green shoots in the business. We do think we'll reach an inflection point at the end of this year. We talked about it a little bit with Acima, Acima GMV. We do expect it to grow in the fourth quarter on a year-over-year basis and potentially in the third quarter. On the Rent-A-Center side, we do think it will be down a little bit in the second and third quarter. from a year-over-year standpoint kind of even out through those summer months, but then really picked back up in the fourth quarter seasonally and be flat to 2022, which is at a much higher level than we were pre-pandemic. So we highlighted a lot of these trends during our last earnings call and then gave guidance for 2023, and we're reaffirming that guidance today. One of the other important factors we talked -- all of us have talked about it now that gives us confidence that we're back on track from a growth standpoint is our underwriting and the processes we've implemented over the last several months. Tyler and Anthony both gave insightful commentary around the technology and the tools that we've implemented. But we had to go through a major change at the beginning of 2022 in our underwriting and really cut back from kind of the stimulus high in 2021 and really tighten up from an underwriting standpoint. And the important part about that is we're better off today from an underwriting standpoint, from an underwriting capability standpoint than we probably ever have been. I always like to say we've probably had to exercise some muscles on the underwriting side and collection side that we haven't had to do for a couple of years. So we'll continue to invest in that process. We'll continue to invest in those tools and really try to optimize both our portfolio, optimize new GMV and ultimately, increase EBITDA dollars. So we do take a very holistic approach to risk, we look at the customer attributes. We look at the product category that they're shopping at. We look at the channel they have come to us, whether it's one of our stores or one of our retailer partner stores or whether they're shopping online or through the e-com channels. We look at whether it's a new customer to us, whether it's a returning customer to us. We actually rank our Acima merchants and even we rank our own stores on the Rent-A-Center side to assess the retail risk. And so we try to take a combination of all those things and try to make the best underwriting decision that we possibly can. Tyler said sometimes it works, sometimes it doesn't. But we look at it at a very granular level. All of us do. And on the committees that we have on a weekly basis, we look at it at a very granular level. We look at both the portfolio, we look at -- and the vintage level and try to make good decisions and find pockets of risk, but also pockets of opportunity but ultimately trying to get to a point where we can make smarter decisions, grow GMV at some point and maintain our losses, and we're going to continue to do that. It's been great to see over the last couple of quarters some of the changes that we've made actually come through the portfolio, both from a loss standpoint and from a delinquency standpoint. And here's some of the data and some of the charts, you can see we've come down off the highs that we had in both businesses, a little bit earlier on in Acima in the first half of 2022. And then with Rent-A-Center jumping up in Q3 and Q4, but both of them coming down nicely in the first quarter. Both on the losses as well as on the past due rates. The other thing I'll point out, though, is that we still have a little room to go to get to where we think is normal. Acima virtual is in the range -- or 6% to 8% range for that business at 7.7%, it's at the high end of that range. Rent-A-Center, we said we've targeted 3% to 4%, it did have a 100 basis point improvement in the first quarter compared to the fourth quarter, but it's still at 4.8%. And as Anthony said, we do believe we have room there to continue to improve. Outside of underwriting, we also have a lot of opportunities here that we've listed on the page to drive expansion, including productivity initiatives and synergies. As we think about what we've done this year, announcing upbound, putting in a new enterprise operating structure, we think that's going to be a key enabler for us to drive a lot of these synergies to align our resources and use those shared practices and shared services. Mitch mentioned our ability to kind of cross-sell and have revenue synergies in those example at the beginning of the presentation between Ashley and Best Buy. Those revenue synergies are real. And we are just now in the first phases, I would say, of implementing a lot of those cross-selling synergies. Another opportunity that we've mentioned throughout the day is around account management, implementing the 50-year history of collections and leveraging the Rent-A-center infrastructure over at Acima, there are also things that Acima brings to the table that are new to Rent-A-Center. So Tyler mentioned a lot about the data analytics and the data capabilities, modeling strategies for us to be able to implement that on the Rent-A-Center side. So we think there's a lot of room for us to continue to share in those best practices and drive synergies between the segments. Okay, moving on to the balance sheet. So the company continues to have a really strong financial position to support our growth and support shareholder returns. We have a solid credit profile with ample liquidity and debt coverage. We mentioned a few times that we are focused on paying down debt to our target level of about 1.5 turns over time. We made progress towards that in the first quarter. We paid down gross debt by just over $40 million. But we still have a really strong liquidity position in the business self -- we are essentially self-funds itself. We have a little bit over $400 million or just under $400 million available under our ABL credit facility. And our long-term debt is staggered. It doesn't mature until 2028 and 2029. So feel really good about where the balance sheet is as well as our liquidity position. Moving on to capital allocation. Obviously, we've mentioned it a few times, the company is very profitable, generate significant cash flow. So how we allocate capital is a critical part of us creating shareholder value. We are focused on allocating capital in a manner that balances short-term value while looking and being mindful of the long-term value. So we've listed our priorities here in order of our strategy. The top 1 being investing back into the business to support the growth and support the expansion and sustainability of our earnings power of our company. Second, paying dividends. We feel like we have a very healthy dividend between if you look at our dividend yield as well as our dividend payout ratio that -- we're going to maintain that dividend, which is very, very sustainable. Next, I mentioned already a couple of times, paying down debt. We do want to get back down to the 1.5x net debt to EBITDA leverage ratio. We will consider other forms of capital allocation if the risk return profile is correct, but this is a focus for us, especially in this environment. We'll continue to look at M&A opportunities. We've talked a little bit today about -- we still have some room to go with the Acima acquisition. We're still going to get that fully integrated before we do another transformational deal. But as Mitch mentioned, that's the history of the company, is to do M&A. So we'll be opportunistically looking at transactions as they come up. Little bit of a bid ask right now in valuations between buyers and sellers, given the uncertainty in the market. But we'll take a look at the appropriate times. And then share repurchases. We will opportunistically look at doing more share repurchases, more on a returns approach rather than a programmatic approach. But we've demonstrated a track record of being good stewards of capital and giving capital back to shareholders when we have it. If you look over to the right-hand side of the chart, over the last couple of years, we've delivered outside of just a normal dividend, almost $500 million of capital back to the shareholders. Okay, so as far as the forecast for the next few years, we've covered a lot of material today between Mitch, Anthony, Sudeep and Tyler. So trying to put it all together for you with some financials all on 1 page. So we believe we have a great opportunity here upbound. We have a really strong, stable business that's been around for 50 years. We have a growth engine in Acima to go out and continue to evolve the business and add new products over time in a disciplined way. So we're trying to give you guys here is a little bit of a framework how you should think about upbound as an investment. And so we've laid out some 3-year growth targets for the company. So these are CAGRs based on the midpoint of our 2023 year-end guidance. We feel like we can grow revenues in the 6% to 8% range. We think we can grow EBITDA in the 8% to 10% range. Through that period of time, we will generate free cash flow of $650 million to $850 million cumulatively. And then moving over to the right on the TSR, total shareholder return. If we take those -- if we take that free cash flow and we assume we keep our dividend at $1.36 per share, and we assume that stays at a current yield, a dividend yield of about 4%. And if we conservatively take all of that excess cash flow above our dividend and pay down debt over the next 3 years, we think we can generate a total shareholder -- annual shareholder return somewhere in the high teens to low 20% range. One other thing that I'll note on this forecast is that this does not include any benefit to our new partnership with Genesis on the credit card side. It also is not dependent on us landing any new enterprise accounts at Acima. So both of those would be incremental to this forecast. So hopefully, putting all this together, you can see why we're excited about the company's prospects. Hopefully, you guys are all excited about the company. So I want to thank you all for your time today. I'm going to hand it back over to Mitch, who is going to give us some closing remarks, and then we'll open it up for Q&A.

Great. Thanks, Fahmi. A lot of information, like Fahmi said. We've shared a lot of information in the last couple of hours, covered a lot of ground. And I'll go back to my opening slide, which was a summary of key investment highlights. And I think you heard this kind of stuff today that how well positioned we are as the leader, how big the market is, the first point up there certainly providing us the opportunity to generate strong profitability and growth at above average rates for quite a few years, really when you think about it. Second, the resiliency of the model. You heard a lot about the resiliency of the model and our track record of how we performed through various economic cycles. The key competitive differentiators. We talked about quite a few of them. I hope that resonated with you. They really can't be duplicated. The synergies between Rent-A-Center and Acima can't be duplicated, nobody else has that footprint. It can't very easily be duplicated and somebody is going to open a couple of thousand retail storefronts to have that crossover synergies. So it can't -- it really can't be duplicated. Our platform can't be -- the fourth point up there with the opportunities we have to offer customers new solutions in our expansion. And some of the things that Fahmi just mentioned that aren't even included in those kind of returns we think we can provide over the next 3-plus years. Strong liquidity, the cash flow speaks for itself. The shareholder value speaks for itself. He talked about the dividend and so forth. And you heard from the leaders today. There's other leaders in the room. We obviously have a lot around the country, but the leaders of each segment, Tyler and Anthony and leader of our technology and Sudeep and then, of course, me and Fahmi. And like so we got some other leaders here, too. But we've got a strong, diverse team that can execute on this plan. So hopefully, you got -- that point came across very well, too. So thank you again, team. A lot of time goes into preparing this. Thank you, Brendan. And we were happy to present this to you now. Questions. Maybe Fahmi, maybe you Tyler and Anthony come up. And then if we get anything that 4 of us can't answer, we'll call one of our friends down here in the front row.

And just for Q&A, if you could raise your hand and give your name and firm and keep it to 2 questions, that would be great.

Sudeep said, I was answering all the tech question, so I will...

Good luck. You may be up here shortly.

All right. I'll kick things off. It's Brad Thomas from KeyBanc right here. Thanks for all the details. Clearly, a lot of work went into this. I think the question is really just around the confidence in the top line outlook for the segments, particularly given that we're in such an unusual spot for the industry today, could you just speak a little bit more to the confidence in the sort of bottom-up build for the organic growth opportunity for the 2 segments?

Sure. Yes, go ahead. You can start...

I was going to say. We probably should let Anthony and Tyler take it but I'll start. And I think you have to look at it between the 2 businesses, right? On the Rent-A-Center side, 2% to 4% revenue growth, top line growth, that if you look and you take out kind of what happened during stimulus and you look at just 2019 and where we are in 2023, it's about 3.5% growth. You take out all that noise in between -- between the pandemic and stimulus. So we think we can replicate that. And Anthony talked a lot about the e-commerce channel and converting a lot of visits into leads and into applications and ultimately, hopefully, to leases. We feel like that's very, very achievable. I know you didn't ask about EBITDA, but I'll even take it down another step to EBITDA. So 2% to 4% for the Rent-A-Center business on revenue, and then we said 3% to 6% on the EBITDA CAGR. And that 1% difference or 1% to 2% difference in operating leverage really stems from losses. So he continued to improve losses on the Rent-A-Center side, but the growth side of that 2% to 4% is very achievable.

I think the other thing you have to remember before these guys can speak about each segment is we're starting to see trade down, so when you think about any economic cycle, these are not overly aggressive numbers as you think about people having the trade down, already seeing higher third-party scores coming into our decision engine of both segments Rent-A-Center and Acima. So just like in '08, '09, we're starting to see it. It took a little longer this time because unemployment has stayed so low for so long, but now we're seeing it as there's tightening above us through more traditional lenders. So when you think about those kind of growth numbers, there's a big segment, and Fahmi had that slide right towards the end where it might go down a little, but our lines stay the same in there. And then when it comes back up, it pulls people up from the bottom of that -- of those columns that he was showing and gets you back to those numbers. So -- and with some of our -- in some of the -- when you add the initiatives onto that trade down, we feel very confident in the numbers we've talked about.

Yes, I would say, I mentioned it many times during my remarks, the traffic that's coming to e-com. I mean just seeing that opportunity, the trade down that Mitch mentioned. And Fahmi mentioned like from an EBITDA perspective, the improvement of losses for the Rent-A-Center business, I look at it the other way, we get our hands around the underwriting. We have our hands around losses. Then especially in a retail store, we've got human beings who aren't chasing a bunch of collections, it gives them more opportunity to focus on the offense on the growth aspect of the business, so...

I'll mirror much of what's already been said. Between underwriting, between trade down and between the seamless efforts throughout the kind of pullback and recessionary period, we've been able to develop those additional channels as additional vectors of application acquisition, GMV acquisition. And so from our perspective, we feel and I -- you heard me say, I almost said easy in front of the script. And you heard that and I took it back, but easy is not the right word, optimistic is the right word. Your question was, are we optimistic about our top line? Absolutely. We've got the right tools. We've got the right positioning. We've got the right people in place. We've got the infrastructure laid out already, and we know where we need to go in order to optimize as Fahmi had put on or mentioned optimize these pockets of GMV within various retail groups and within various verticals to truly drive that GMV.

We said for the Acima side, 10% to 12% of GMV growth on a CAGR basis between now or the end of this year into 2026. And I think about that chart that Tyler put up there on retailer growth that we've had and even through kind of the tough times that we're seeing now. I think that's what gives us the confidence. So right now, we're looking at furniture being one of our -- still our biggest segments, and that pull-forward effect will -- further we get away from 2021, each month that we go by, that pull-forward effect is going to lighten up. And I think on top of that, you put in some of the optimization from an underwriting standpoint, and we're already seeing the trends, right? In the first quarter, we had thought it was going to be down mid-teens, and we ended up down almost 12%. And then we think we're going to beat the guide for the second quarter and then grow into the second quarter. So the momentum is there.

Comping over the tightening of the underwriting to as a big part of -- we're starting to grow in the latter half of the year.

Kyle Joseph with Jefferies. Thanks for putting this together, very helpful. 2 questions. I'll start with Anthony. Just really kind of want to dig into the kind of health of the underlying consumer. Obviously, there's a lot of moving parts, inflationary impacts post stimulus in '22. Obviously, there was a lot of concern that the lower tax refunds this year were going to be kind of the knockout punch, but consumer has been fairly resilient. Obviously, they're still employed. Inflation hasn't gone away, but just yet, your boots on the ground, you interact, consumer just kind of get...

Sure. I think Mitch mentioned it during the earnings call that our customer had their recession in Q3 and Q4, they've adapted. They've normalized now. I think they're living in this new normal. I think for those that are interested in the job, there's plenty of jobs out there for our customer right now. So I think that they're working. And I think they're healthy. If they want a job, they can certainly find one. I think that wages have increased and our customers have scaled back where they need to. They still have needs with our company. You mentioned the income tax season. So was it slightly muted? Sure. To this point, what I can say is the customers have stayed on rent, and that's good for us, right? It's helped the portfolio hold up, and that's another thing that leads me to be optimistic about how we can finish this year, as Fahmi had mentioned, getting back to normal because the customer is working. They've had their recession, they've normalized and they're staying on rent to this point. So I feel pretty optimistic about it currently.

And Kyle, I'd add to that. And when you think about the trade down in our business, especially on the Rent-A-Center side, when you get trade down, you actually have a better credit quality coming in, right? And as long as we're good enough, and I think we're proving right now with the adjustments we made from an underwriting standpoint, so as long as you're good enough to know where to cut off at the bottom when it goes down like that, you get actually a better customer coming in. If you don't cut off the bottom when in this kind of environment, you might have a problem. And we didn't cut it off fast enough last year. That's when we had the higher losses, and that's why you're seeing them coming down now because we've figured out where to cut off now and then -- and we got a better customer coming in. So that's why you're seeing the improvement you're seeing now. Not too many businesses with tighter underwriting can actually have a better customer coming in. It's one of the benefits being at the bottom of the waterfall, so to speak.

Got it. Very helpful. And then shift over to Tyler. I would say the industry had a lot of momentum in terms of landing large nationwide retailers pre-pandemic. Since then, it's been not just you guys, the industry, broadly, has been relatively quiet in terms of landing large nationwide retailers. 2020, obviously, everyone is concerned with the pandemic, maybe '21 was overshadowed by BNPL or the Pay in 4s and whatnot. But as we've -- as retailers have started struggling in the post-stimulus world, I would have thought this might be the impetus for a retailer to add. So what's it going to take to get over the hill and to get retailers -- large retailers to add? Second part of the question is, is that even as big of a concern as it once was given all of your alternative products?

That's a great question. I appreciate it. So I would tell you that back in 2020, like you say, there's a lot of concern, there's a lot of worry about where the world is going, much less the economy, right? And companies buckle down and they try and figure out what they need to do in order to survive as retail drops off and as sale of goods drop off. 2021 comes around and everybody realizes that what they really need to do is reinvest resources into making online transactions more fluid. And so the same tech resources that otherwise would have integrated an Acima or somebody else are now being dedicated to improving infrastructure within their internal environments in order to capture all the sales volume that can come through the online environment. Now we're into 2022, 2023, right? So 2022, there's all the things that happen inside 2022. Spending falls off again, and you've got some interesting things there. But here we are in 2023 and retailers are looking around and saying to themselves all right, great. Now I understand sort of what the marketplace looks like. It's still a little uncertain, but I got a better grasp of it. And more to the point, now I've got the tech resources available to do some of these integrations, not to mention the fact that some of us have come up with solutions that don't require tech integration. And so the conversations are starting to increase, improve and become extraordinarily meaningful within the enterprise environment. I'm not going to say that, that's still an easy win out there, but it is something that's starting to pick up in both velocity and in quantity throughout the marketplace, which is encouraging. So that's the first half. The second half of your question was.

Is it still as important to us as it once was?

Yes. Is it still as important to us as it once was. Absolutely, right? At the end of the day, I look at it like it is important because it continues to improve Acima. Now is it as important to the growth numbers that you saw. No, we didn't account for it at all. But is it important to us? Absolutely, right? We want to be able to serve our customers where they want to go, and that includes all of the big enterprise relationships that you see out there in the marketplace. And so it's still an extraordinary focus. We hired Mike Bagull. We hired a team around Mike in order to facilitate those conversations. And we wouldn't have gone through that effort all by itself if it wasn't something that we consider truly important. But we also -- we look at it again, not just from the perspective of the business, but from the perspective of our customer and what it means to them to have that normalized shopping experience out in the marketplace at all the big box and big retailers that we all go to on a daily basis.

Yes, good point. Mike's been here about 9 months, Kyle. And we've got the biggest team around Mike. Mike came from Synchrony. Mike Bagull, I don't know, I'll ask if you have anything to add, you can grab the mic. But it's the biggest team we've had and we're the leader that someone was on the enterprise team at Synchrony like, Mike, this is the best effort we've had at it as well. So yes, it's very important to us. I don't know anything to add from anything we said or?

Yes, I think the only thing I might add is we do see an uptick as the pipeline has increased and folks who don't have the product today, not necessarily across the biggest of the big, but across the spectrum of everything that we chase. I think the issues that you can then run into on the biggest of the big is they're huge organizations. We talk to a certain segment of the company and kind of put our best foot forward as to what this might mean to them and their customer base. But then ultimately, you can see the process happening now with racks and stacks against all the priorities within the organization, and that's kind of often [ weather up or meet to the road. ] So I think the dialogue is ongoing as to when it meets the top X number of priorities that get initiated out, I think is kind of the -- when somebody will land the next big deal.

Bobby Griffin from Raymond James. Appreciate all the info and you guys taking my questions. I guess first is more kind of a near-term question, then I do have 1 for Acima as well. Just this year has been kind of very unique with the tax refund season the way it played out. So if you look at the cohort of leases that you guys did, right, say, in December and January, I think last time we spoke, we were talking about how we got to kind of see how they perform to see what we learned from those consumers that would have maybe typically purchased an early option but didn't. So is there anything you can share there as we've kind of moved further away from maybe the buyout season or how those leases are performing, anything unique there for us?

Yes. At our expectations, for sure. And as Fahmi said earlier, reaffirming guidance today, everything set our expectations. Certainly, not every single one is going to convert to a full term payout, but we expect some falloff there. But certainly, to expectations, and I think you just mentioned it, Anthony, it's not like we're getting the returns, seem to be holding up very well. And we'll have a few more losses without the payouts. So we've got that factored in, though. But we haven't had any surprises. They're holding up really kind of extraordinarily well at this point.

Yes. I think when I think about the losses and those cohorts at this point, we're just expecting more seasonality, more typical seasonality as we get into the warm weather months, Mitch mentioned a couple more returns, but not that it's fallen off of a cliff. So they're performing.

In the 12% revenue growth, is there just -- can -- is there a way to unpacking maybe a little further into door growth? And/or is it ticket per door? And I guess, what would drive that to kind of get to that level? And then I guess the second part of that, and we were talking about it earlier with the large accounts. From us, it's always hard to kind of get our heads wrapped around the size of the TAM that gets put out there by you and your primary peer is how large it is versus where the GMV is today. So when you look through maybe top 100 retailers, do you see a large number that don't have these products that could and is there any examples like that. I mean obviously, we had 1 big home improvement has one, 1 dozen. But just like throughout kind of when you work your way down, is there more examples of that, that stick out there that maybe we're not realizing to really get to that large of a TAM that is talked about.

Sure. Okay. So let's take the TAM question and we'll start there. When we look at the TAM and those top 100 they're penetrated. There are some groups in there that have it, but there are some identifiable names, and we do have those target list. And Mike is chasing those on a daily basis, making sure that we can get in front of them. And we're having those competitive conversations as between us and in some of our peers, not all of them. So from the perspective of the TAM, we truly do believe that it's achievable and realistic based on the fact that there is enough interest, enough continued pipeline, enough conversations occurring amongst those that don't have or even amongst some of those that do have an incumbent that are looking to at least understand what the other options in the marketplace are. So that's the first part. Now on the second part, unpacking the 10% to 12% top line growth. We've done that across a number of different initiatives, whether that's improving the efficiency and the return rates of existing customers, whether that's changing value props a little bit from 1 place to another in order to drive more value. Whether that's bringing on all those new doors that we talked about before. It's distributed among 7 or 8 different initiatives inside Acima. And so no one initiative is designed to make up all that difference and get us to where we need to go. There's a series of things, each of which has been evaluated and we believe is truly attainable and achievable within there, drive us to that number.